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INVESTIGATION OF IMPROPER ACTIVITIES IN THE I LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPEOPER ACTIVITIES IN THE
LABOE OE MANAGEMENT EIELD
EIGHTY-FIFTH CONGRESS
SECOND SESSION PURSUANT TO SENATE BESOLUTIONS 74 AND 221, 85TH CONGRESS
JULY 16, 16, 17, 18, AND 31, 1958
PART 34
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
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Shipment ID BPL: Gov Docs
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
OX DIPEOPER ACTIVITIES IX THE
LABOR OR M.iXAGEMEXT EIELD
EIGHTY-FIFTH COXGEESS
SECOND SESSION PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS
JULY 15, 16, 17, IS, AND 31, 1958
PART 34
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
i
21243
UNITED STATES
GOVERXMEXT PRIXTIXG OFFICE
WASHINGTOX : 1938
\^
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
^ HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPEOPEE ACTIVITIES IN THE
LABOE OE MANAGEMENT EIELD
EIGHTY-FIFTH CONGRESS SECOND SESSION
PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS
JULY 15, 16, 17, 18, AND 31, 1958
PART 34
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT EIELD
EIGHTY-FIFTH CONGRESS
SECOND SESSION PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS
JULY 15, 16, 17, 18, AND 31, 1958
PART 34
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
UNITED STATES GOVERNMENT PRINTING OFFICE
21243 WASHINGTON : 1958
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The RKSTAriLv.vT IxcrsTEx ix the CEiCAao Axsa. ^Hotel and R^istAurant Einpk>\vi-5 and Baneudoj? International FiiiorO
Testimony of — p__
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Boston Public Library ouperintendent of Documents
NW1-M958
SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
JOHN L. McCLELLAN, Arkansas, Chairman IRVING M. IVES, New York, Vice Chairman JOHN F. KENNEDY, Massachusetts KARL E. MUNDT, South Dakota
SAM J. ERVI.V, Jr., North Carolina BARRY GOLDWATER, Arizona
FRANK CHURCH, Idaho CARL T. CURTIS, Nebraska
Robert F. Kennedy, Chief Counsel BuTH YouNn Watt, Chief Clerk
II
CONTENTS
The Restaurant Industry in the Chicago Area
(Hotel and Restaurant Employees and Bartenders International Union)
Testimony of — Page
Adler, Jay 12894, 12897
Aiuppa, J oseph 13100
Alex, Gussie 13118
Allgauer, Gustav 12949
Annes, George 1 2997
Christiansen, Mae 13048
DeMar, Jack A 13001
DeSantis, Anthony 12908
Erake, George T. 12887
Duffy, LaVern J __ 13030
Eberhart, Arthur 13008
Griffith, Merlin 12920
Gotsch, Gerald 12896, 13095
Hessberger, George 1 2902
Hoch, Charles 13046
Jansen, Richard 13012
Kellv, James P 13104
Kiesau, Donald F 12861, 12863
Kinner, Jack 12988
Kouba, Louis 13064, 13073
Lardino, Danny 1 303 1
Lardino, John 13022, 13030
Leonardi, Danny 13053
Madia, Louis 13084
McFarland, John 12977
Milas, Andrew 12968
Mundie, James F 12863, 12947, 13028
O'Connor, James 1 2939
Pechan, I\f arjorie 13044
Ricketts, Ashley U 12992
Scholl, Williaml 12927
Schwartz, Julian 12983
Segal, Ellis -- 12905
Sturdevant, Beverly 13048
Trungale, Frank 12933
Wilkos, Joseph 13039
IV
CONTENTS
EXHIBITS
Introduced Appears
27. Worksheet, Chicago Restaurant Association profit-and- on page on page
loss statement .^ 12863 (*)
28. Memorandum to Robert F. Kennedy from James F.
Mundie re employment of Abraham Teitelbaum, Chi- cago Restaurant Association, Chicago, 111 12868 (*)
29. Letter dated March 2, 1951, addressed to Mr. Abraham
Teitelbaum, from D. F. Kiesau, executive vice presi- dent, Chicago Restaurant Association 12869 (*)
30. Minutes of the board of directors meeting held October
3, 1952, signed by D. Kiesau, secretary of the meet- ing 1 12874 (*)
31. Letter dated July 21, 1950, addressed to Abraham Teitel-
baum and signed by D. F. Kiesau, executive vice
president, Chicago Restaurant Association 12876 (*)
32. Minutes of the board of directors meeting held at the
association office, July 8, 1949, and signed by D.
Kiesau, secretary of the meeting 12881 (*)
33. List of fires in restaurants from January 1957 to May
1958 12979 (*)
34 A. Picture of the Allgauer Restaurant fire 12979 (*)
34B. Picture of the Allgauer Restaurant debris after the
fire 12979 (*)
35. Signature card No. 8393 of Hotel Whitmore, Dallas,
Tex., for Danny Lardino 13033 (*)
35A. Hotel Whitmore bill in the name of Danny Lardino and
Lon Schneider 13034 (*)
36. Compilation showing yearly savings to 27 restaurants
in the Chicago area from wages paid below union
scale 13096 (*)
Proceedings of —
July 15, 1958 12861
July 16, 1958 12949
July 17, 1958 13039
July 18, 1958 13093
July 31, 1958 13117
'May be found In the flies of the select committee.
INVESTIGATION OF I3IPR0PER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
TUESDAY, JULY 15, 1958
United States Senate, Select Committee on Improper Activities
IN the Labor or Management Field,
Washington, I). O. ^ The select committee met at 10 a. m., pursuant to Senate Resolu- tion 74, agreed to January 30, 1957, in the caucus room. United States Senate, Senator John L. McClellan (chairman of the select com- mittee) presiding.
Present: Senator John L. McClellan, Democrat, Arkansas; Senator Sam J. Ervm, Jr., Democrat, North Carolina; Senator Barry Gold- water, Republican, Arizona.
Also present : Robert F. Kennedy, chief counsel ; John J. McGovern, assistant counsel; LaVern J. Duffy, investigator; James P. Kelly, in- vestigator; James Mundie, investigator; Ruth Young Watt, chief clerk.
(At the convening of the session, the following members were present: Senators McClellan and Goldwater.)
The Chairman. The committee will come to order. Call the next witness, Mr. Kennedy.
Mr. Kennedy. Mr. Donald F. Kiesau.
The Chairman. Mr. Kiesau, come forward, please. Be sworn. You do solemnly swear the evidence you shall give before the Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. Kiesau. I do.
TESTIMONY OF DONALD F. KIESAU, ACCOMPANIED BY HIS COUNSEL, THOMAS E. KEANE
The Chairman. Mr. Kiesau, will you state your name, your place of residence, and your business or occupation, please, sir ?
Mr. Kiesau. My name is Donald F. Kiesau. I live at 624 Indian Road, Glenview. I am employed as the executive vice president of the Chicago Restaurant Association.
The Chairman. Thank you, sir. Do you have counsel ?
Mr. Kiesau. I do.
The Chairman. Counsel, identify yourself for the record, j)lease.
Mr. Keane. Thomas Keane, 111 West Washington Street, Chicago, 111., a member of the Illinois bar.
The Chairman. Proceed.
12861
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vi'T delve— I can tell you that the of the major ones are, are pretty
r the most part, are just partially
liatareall miion? iiitial number that are. il«l you give us an estimate of how
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'■::'; ■ .^atall? iiibie to 1 I you. We don't check. We don't
I iKJut the voluntary fund? "Wliat
mtary ccirihution fund is something, if you ^ ' ' "Id you about either yesterday or
iliMost tlie origin of Uie Chicago I, some 44 years ago, where res- itarily contributed some money. Ixjen with the association, since ir, previous to that also. I lie volinitary fund ? ilarily contribute. " they contribute? ■ 'I he voluntary contribution fund
them in their labor relations
I the past, to pay the salary and
mt, is that right ?
or help a restaurant out in case
i h'.iril of directors the majority
L'unizod.
did! ' < uiisultant that you had up to
ight,
i you tell IS who suggested that you retain
■ ' • • ^' Mr. TofTenetti.
irround of Mr. Teitelbaum that ' ( -taurant Association?
^ i'tti have to say about him?
: vumstances, and this is 20 years
A 4 i
I liere was a strike at a restaurant
1 nt, and it had been going on for
\niX much dilliculty in operating,
;i:i::int', I'roj ihc fostimony that was given here
I situationj Mr. ToH'enetti brought it to the
. .all whetl r it was a committee at that time
•.<\ of direciis that a person, a friend of his,
A . who hadonie to his restaurant on numerous
12862 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. How long have you been with the Chicago Restau- rant Association ? Mr.KiESAU. Twenty-two years. .•.:^„2
Mr Kennedy. Have you always held this position i
tr f rK^p."" m'a\ttrma^C°now of the Chicago Restaurant
''^'tZL'^Z'^LT^sl^^^:t''li:<.^^tion^^ today, I would esdfuat;, in the ueighborliood of 700 members, 700 companies. Tlmt would represent, probably, because of the multiple-unit organi-
T-nfimi some 1,800 or 2,000 units. . . ^,.
Mr 'KmNEDY. How many different restaurants are there m Chi- ca^^' What percentage of the restaurant owners do you have m your association ? ^^^ ^^^^ classified red book, it
wouM Lt, tlTe last time we counted them about 5,000 restauran s listed in the red book. If you were to ask what we represented m the way of volume, it would be a different figure, because of the fact that we represent, probably, the larger restaurants, as a rule.
Mr^KENN^DY. On the 5,000 ; is that the owners, or is that units? Mr KiESAU. Those are-I believe those are units listed m the red book In other words, there would be the Marquis Co., for example, and then underneath Marquis Co. would have their ^^''^''^^^T^^ Mr. Kennedy. So, you represent about 1,800 out of 5,000 units i Mr. KiESAU. I would guess that. ^ i ^-p
Mr. Kennedy. But the imits you represent do a greater volume ot
business .
Mr KiESAU. Generally speaking, that is true. . u •
Mr.* Kennedy. What percentage of the volume of restaurant busi- ness in Chicago do you believe you represent ? Ml- KiESAU. I think it would be safe to say that we represent
somewhere between 60 and TO percent. ^ ; ,f ^^„
Mr Kennedy. Could you tell us what the makeup of the association
is? bo each of the restaurant owners pay a certain amount ot dues i Mr Kiesau. Yes. Our membership dues are based upon the num- ber of employees. I can tell you exactly, if you would like to know. For example, the smallest restaurant with any number of employees up to 5 would pLy $30 a year dues. From 6 to 10 would pay $35 From 11 to 15, $40, and so forth. When we get up into the higher brackets of 300 employees, then it is prorated down ]ust a little bit. _
Mr. Kennedy. What is the income of the restaurant association each
year, approximately ? , i • i i.\ +^j-„i
Mr. KiESAU. The income from membership dues, or the total
budget? „ , 1 • 1
Mr Kennedy. The income from membership dues. Mr Kiesau. Membership dues— last year, I believe, our audit shows,
and Mr Mundie, I believe, has all those figures, I believe showed in the
neighborhood of $35,000. ^- ,
Mr. Kennedy. Do you have any other sources ot income i Mr. Kiesau. Yes, sir.
Mr Mr Kennedy. Could you tell us what they are i Mr Kiesau. We have a monthly trade publication where we receive
revenue from advertising. We have an annual buyers' guide. V\ e
receive a certain amount of money from advertising.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12863
^^resf^''''^''''' ^""^ '"'''"^ ^'"""^ '^'^' ^^ ^^°'^ • ^^ y«^ have those
Mr. IWu I am sorry. Mr. Mundie has all theose figures. I will take whatever figures he states there and verify them
Mr. Kennedy. The buyers' guide
Mr. KiESAu. The buyers' guide, if I remember, the net revenue last year was in the neighborhood of $28,000 or $29 000
,^^''^^^''''^''1 ^^^^i" ""^^h*- ^^^^^ ^28,000. The total income-
strn,M;. Sfrman.^''^^ ^^"^"^ '' "^^°"^- ^^^- ^^^^ ^^ ^een
TESTIMONY OF JAMES MUNDIE— Resumed
The Chairman. Mr. Mundie, you have examined the books of the association. You may testify regarding the revenues of the associa- tion and their source and amount.
Mr. Mundie. Yes, sir.
Mr. Kennedy. Just for the last year.
Mr. Mundie. Income from membership dues, $38,212.37: income from interest earned, $7,996.34.
Mr. Kennedy. Just give the total income.
Mr. Mundie. Total income is $94,206.14.
Mr. I<j:nnedy. And give the main sources, Mr. Mundie.
Mr Mundie. The main sources are membership dues, buyers' guide, and Midwest Restaurant News. , j s u«,
Mr. Kennedy. Wliat is the source of that ? What is the total ?
Mi\ Mundie. Membership dues are $38,212.37. Midwest Restau- rant News IS $4,350.14. Buyers' guide is $27,904.32.
The Chairman. That sheet you are testifying from ; is that a perma- nent record, or can it be made available for any exhibit ?
Mr. Mundie. This could be made available for an exhibit.
The Chairman. You have checked the accuracy of the figures on that sheet, have you ?
Mr. Mundie. I have, sir.
The Chairman. It may be made exhibit No. 27, for reference.
(The document referred to was marked "Exhibit No. 27" for refer- ence and may be found in the files of the select committee.)
TESTIMONY OF DONALD F. KIESAU, ACCOMPANIED BY COUNSEL, THOMAS E. KEANE— Eesumed
Mr. Kennedy. Would those figures be about right, Mr. Kiesau?
Mr. KiESAu. All except the figures for the Midwest Restaurant News, our monthly publication. I think the gross figures were larger than that. b *= fe
Mr. Kennedy. Perhaps it is broken down further. I think all of the figures, though, appear on the sheet. That is for 1957, I believe. How do you operate the Chicago Restaurant Association? Do you have a board of directors ?
Mr. Kiesau. Yes, sir ; we do.
Mr. Kennedy. How many are there ?
Mr. KiESAu. We have a board of directors totaling, I believe, about 23 people. They are made up of the officers who are ex officios of the board of directors, and that is the president, 3 vice presidents, and the
12864 IMPROPER ACTIVITIES IN THE LABOR FIELD
treasurer, and then we have 12 board members of ^^^^J^^^^^^^^^^ 4 new ones elected every year so there is a rotating board every 3 years and in addition to that, all the past presidents who a^ purrenuy ope^at^ng? active in the restaurant business, are also ex officios m the
'%"\tT^Z"m\ny of those individuals receive any salary or
expenses ?
Mr. IviESAU. They do not.
Mr. Kennedy. None of them?
Mr. KiESAu. None of them. _
Mr. I^NNEDY. None of the officers, either i
Mr. KiESAU. None of the officers.
Mr. Kennedy. Do you receive a salary ?
Mr. Kennedy. Are^you the only one that receives salaiy and ex-
^^M?!iviesau. We have a staff of six people in the office, all of which receive a salary.
Mr. Kennedy. Wliat is your salary i
Mr. KiESAU. Do you mean currently ?
Mr. KiESAU^'^My 'current salary is $25,000 a jear, ^id in the past year I received a bonus of $7,000, making a total of $32,000. Mr.IvENNEDY. What was it the year prior to thaU Mr. KiESAU. The year prior to that, I believe, the total was 30. Mr. IvENNEDY. Who sets your salary ?
Mr. KiESAU. The board of directors. . n .- ._^9
Mr Kennedy. They are elected, are they, the board of directors^ Mr. KiESAU. I will repeat again. The board of directors— well, is
'^ mTkennedy. No ; it is not necessary. They are elected, are they ?
Mr. KiESAU. Yes, sir ; 12 of them are.
Mr. Kennedy. Periodically?
Mr KiESAU. Twelve of the officers are; yes, sir.
Mr' Kennedy. Out of the 700 or 800 restaurants that you have, not units'but restaurant owners, and some 1,800 restaurants, what per- centage are union and what percentage are nonunion ^
Mr KiESAU. This is purely an estimate, because we never tried to differentiate and list them as such. We never have. But i would guess— I think you will have to qualify that question by saying par- tially union or all union. There is a difference.
Mr. Kennedy. How many are nonunion; how many are partially union ; and how many are all union ? -r n ^i <-
Mr KiESAU. That is very difficult to answer. I would guess that, out o*f the 700 members, probably 150 would Imve some sort of un- ionized employees in their place of business. They would be either all union or partially union. .
Mr. Kennedy. And all the rest have no unions at all i
Mr. KiSEAU. That would be my estimate.
Mr liJsNNEDY. Out of 150, could you give us any estimate as to how many of those are completely union and how many are just partially union ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12865
Mr. KiESAu. No ; I can't. "We never delve — I can tell you that the hotels that are members, and most of the major ones are, are pretty much completely unionized.
Mr. IvENNEDY. The restaurants, for the most part, are just partially union. Are there many restaurants that are all union ?
Mr. KiESAu. Yes ; there is a substantial number that are.
Mr. Kennedy- Out of the 150, could you give us an estimate of how many ?
Mr. KiESAtJ. I couldn't tell you.
Mr. Kennedy. You couldn't tell us at all ?
Mr. KiESAu. I am unable to tell you. We don't check. We don't delve into that.
Mr. Kennedy. Mr. Kiesau, what about the voluntary fund ? What is that?
Mr. Kiesatj. The voluntary contribution fund is something, if you recall, that Mr. Marquis, I believe, told you about either yesterday or Friday. It started, so I am told, at almost the origin of the Chicago Restaurant Association, back in 1914, some 44 years ago, where res- taurant folks got together and voluntarily contributed some money. It has been in existence since I have been with the association, since 1936, and I believe, from what I hear, previous to that also.
Mr. Kennedy. Wlio contributes to the voluntary fund ?
Mr. Kiesau. Those who desire voluntarily contribute.
Mr. Kennedy. For what purpose do they contribute ?
Mr. Kiesau. They contribute to the voluntary contribution fund for whatever help can be given to them in their labor relations matters.
Mr. Kennedy. Primarily it was, in the past, to pay the salary and expenses of the labor-relations consultant, is that right ?
Mr. Kiesau. That is correct. And/or help a restaurant out in case of a strike where, in the opinion of the board of directors the majority of the people were not organized.
Mr. Kennedy. The labor-relations consultant that you had up to 1953 was Mr. Teitelbaum ?
Mr. Kiesau. That is right.
Mr. I^nnedy. Could you tell us who suggested that you retain Mr. Teitelbaum?
Mr. Kiesau. Yes. 1 believe it was Mr. Toffenetti.
Mr. Kennedy. What was the backgi^ound of Mr. Teitelbaum that made him attractive to the Chicago Restaurant Association ?
Mr. Kiesau. I didn't inquire.
Mr. Kennedy. Wliat did Mr. Toffenetti have to say about him ?
Mr. Kiesau. If I remember the circumstances, and this is 20 years
ago
Mr. Kennedy. About 1938?
Mr. Kiesau. About 1938 or 1939. There was a strike at a restaurant company in Chicago, Drakes Restaurant, and it had been going on for a long period of time. They were having much difficulty m operating, as you probably can imagine, from the testimony that was given here all last week in similar situations. Mr. Toffenetti brought it to the attention of— I don't recall whether it was a committee at that time or directly to the board of directors that a person, a friend of his, or a person that he knew, who had come to his restaurant on numerous
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occasions as a customer, had indicated that he could possibly solve the
strike. , i , ,
Mr. Kennedy. Did anything come to your attention that he had had any experience wliatsoever in labor-management relations? Mr. KiESAF. I didn't inquire into that.
Mr. Kennedy. After he was retained in 1939, did you ever inquire to find out i
Mr. KiKSAu. No, I felt that was a matter for our board of directors to determine.
Mr. Kennedy. Did you ever hear anybody ever state that he had any experience whatsoever in labor-management relations?
A[r. KiKSAU. Not tliat I recall.
Mr. Kennedy. In 1942 or thereabouts, he retained to assist him Mr. Louis Komano. Did you know anything about Mr. Komano's back- ground ?
Mr. KiESAU. Only wliat I read in the papers.
Mr. Kennedy. Did you make any protest at that time or later on?
Mr. KiESAU. No. I tliought our board of directors would have read anything that I might have read, and it was not my opportunity or duty to tell. I was an employee of the association. Anything that I might have known they would liave known. They were the ones that retained him.
Mr. Kennedy. You had Mr. Teitelbaum, who was associated with all of the big gangstei"S in Chicago, and, of course, had been xVl Capone's attorney for a while. Mr. Ix)uis Romano had been indicted a number of times for murder, and had been kicked out of the restau- rant union itself in 1940. He was put in there by the syndicate. That is what the judge found. Then he goes to work and starts do- ing work for the restaurant association. Was there any knowledge or information about either one of these individuals discussed with the membership of the association ?
Mr. KiESAU. Not that I recall.
Mr. Kennedv. Did you make any protest about it?
Mr. KiKsAu, You didn't say that Mr. Romano worked for the asso- ciation, did you?
Mr. Kennkdv. lie worked for Mr. Teitelbaum, as I understand it, and Mr. Tietelbaum at that time was doing work for the association.
Mr. KiESxVu. That is right.
Mr. Kennedy. He was an assistant to Mr. Teitelbaum during this period of time.
Mr. KiESAT. Yes.
Senatt)r (K>i,i)WArEK.
Mr. KiESAU. No, sir.
Senator (.iou>wai mj. moneys?
Mr. KiESAU. Yes, sir.
'r ^f n ^*'^''^*^^*^'- ^^^- ^*'^'^^""' '^^'J'^^'i ^^»^ it that vou learned Mr leitelhaum was makuig certain pavoH's to union otiicials?
Mr. KiKSAU. I did tiot know of 'that, Mr. Kennedv, not until long after it happened. H" you will ivcall the testimonV that has been given here under oath, m the U\s Johnson case, I don't believe that Mr. Johnson told me anything about that until some ^ vears subse- quent to the tune that Teitelbauiu and him hud settled'the matter
May I ask, was he paid by the association? Mr. Teitelbaum paid him out of his own
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12866 IMPROPER ACTIVITIES IN THE LABOR FIELD
occasions as a customer, had indicated that he could possibly solve the strike.
Mr. Kennedy. Did anything come to your attention that he had had any experience whatsoever in labor-management relations? Mr. KiESAU. I didn't inquire into that.
Mr. Kennedy. After he was retained in 1939, did you ever inquire to find out ?
Mr. KiESAu. No, I felt that was a matter for our board of directors to determine.
Mr. Kennedy. Did you ever hear anybody ever state that he had any experience whatsoever in labor-management relations? Mr. KiESAU. Not that I recall.
Mr. Kennedy. In 1942 or thereabouts, he retained to assist him Mr. Louis Romano. Did you know anything about Mr. Romano's back- ground ?
Mr. Kiesau. Only what I read in the papers.
Mr. Kennedy. Did you make any protest at that time or later on ? Mr. KiESAU. No. I thought our board of directors would have read anything that I might have read, and it was not my opportunity or duty to tell. I was an employee of the association. Anything that I might have known they would have known. They were the ones that retained him.
Mr. Kennedy. You had Mr. Teitelbaum, who was associated with all of the big gangsters in Chicago, and, of course, had been Al Capone's attorney for a while. Mr. Louis Romano had been indicted a number of times for murder, and had been kicked out of the restau- rant union itself in 1940. He was put in there by the syndicate. That is what the judge found. Then he goes to work and starts do- ing work for the restaurant association. Was there any knowledge or information about either one of these individuals discussed with the membership of the association ? Mr. KiESAU. Not that I recall. Mr. Kennedy. Did you make any protest about it ? _ Mr. KiESAU. You didn't say that Mr. Romano worked for the asso- ciation, did you ?
Mr. Kennedy. He worked for Mr. Teitelbaum, as I understand it, and Mr. Tietelbaum at that time was doing work for the association. Mr. Kiesau. That is right.
Mr. Kennedy. He was an assistant to Mr. Teitelbaum during this period of time. Mr. Kiesau. Yes.
Senator Goldwater. May I ask, was he paid by the association? Mr. Kiesau. No, sir.
Senator Goldwater. Mr. Teitelbaum paid him out of his own moneys ?
Mr. Kiesau. Yes, sir.
Mr. Kennedy. Mr. Kiesau, when was it that you learned Mr. Teitelbaum was making certain payoffs to union officials ?
Mr. Kiesau. I did not know of that, Mr. Kennedy, not until long after it happened. If you will recall the testimony that has been given here under oath, in the Les Johnson case, I don't believe that Mr. Johnson told me anything about that until some 3 years subse- quent to the time that Teitelbaum and him had settled the matter.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12867
Mr. Kennedy. Did you know while Mr. Teitelbaum was working for the association that he was making these payoffs to union officials ?
Mr. KiESAU. No, sir.
Mr. Kennedy. Let me state as an example the Nantucket Restau- rant. We had some testimony before the committee from Mr. Reed of the Nantucket Restaurant that Mr. Teitelbaum participated in attempting to get $500 from him in order to pay to a union official.
Mr. Kiesau. Yes, sir. You will recall the testimony of that by Mr. Reed. "\Ylien I learned of that through a telephone conversation be- tween Mr. Reed and myself, I suggested that he come downtown, and I immediately called Mr. Drake who was the president of the asso- ciation at the time, and I think we set an appointment for the very next day. I think that testimony that you already have tells you what happened. It was something that we absolutely would not counte- nance, have anything to do with, and we insisted on Mr. Teitelbaum returning the money to Mr. Reed.
Mr. Kennedy. Did you fire Mr. Teitelbaum then?
Mr. Kiesau. No, sir.
Mr. Kennedy. You knew Mr. Teitelbaum had participated in a bribe, extortion, whatever it might be, back in 1949 and 1950. These facts were brought to your attention. Why didn't you take steps to have him fired at that time ?
Mr. Kiesau. Again, Mr. Kennedy, that was not my prerogative to do that.
The management committee and the board of directors
Mr. Kennedy. Whose prerogative was it, then ?
Mr. Kiesau. The board of directors.
Mr. Kennedy. And who were on the board of directors at that time?
Mr. Kiesau. You have the minutes of the— all of our minutes, I believe you have, and if you will give me that information, I will be glad to tell you.
Mr. Kennedy. Did you bring to the attention of the board of directors that Mr. Teitelbaum had been involved in this ?
Mr. Kiesau. Yes, sir.
Mr. Kennedy. You made a report to them ?
Mr. Kiesau. Yes, sir.
Mr. Kennedy. And the board of directors took no steps against Mr. Teitelbaum at that time ?
Mr. Kiesau. No, sir.
Mr. Kennedy. Do we have a list of the board of directors at that time?
Mr. Chairman, when we get that list, could we have that placed in the record ?
The Chairman. Yes. "Wlio procured the list from the files ?
Mr. Kennedy. We will have to get the list, Mr. Chairman.
Mr. Kiesau. That may not be a complete list of the board of direc- tors. That might be just those that were in attendance at that meet- ing. I can give you the additional ones.
The Chairman. May I ask Mr. Mmidie if you have the hst of the directors ?
Mr. Mundie. No, sir.
The Chairman. Mr. Duffy, did you procure it ?
12868 IMPROPER ACTIVITIES EST THE LABOR FIELD
Mr. Duffy. Senator, we have a list of the people in attendance at the meeting, but we do not at this time have an actual list of the members. But we have it in our files.
The Chairman. Where did you procure the list ?
Mr. Duffy, From the files of the Chicago Restaurant Association.
The Chairman. When it is produced, it may be placed in the record at this point as exhibit 28.
(The document referred to was marked "Exhibit 28" for refer- ence, and may be found in the files of the select committee.)
Mr. Keane. The minutes of the meeting will show who was present at the meeting, also.
The Chairman. Mr. Duffy, do we have the minutes of that meet- ing, showing who was present, showing the directors who were pres- ent, and others who were present at the meeting ?
Mr. Duffy. Senator, my examination of the minutes of the Chicago Restaurant Association, in that I did not find any minutes reflecting this particular situation.
The Chairman. All right. The witness can testify to it. Proceed.
Mr. KiESAU. What was the question, sir ?
Mr. Kennedy. Mr. Duffy, I believe, stated that he did not find anything in any of the minutes of the Chicago Restaurant Association indicating that members of the board of directors were informed by you that Mr. Teitelbaum was involved in this.
Mr, KiESAU. The board of directors was told, and they can be sub- penaed to testify, I am sure of that.
Mr. Kennedy. Mr. Kiesau, that may very well be true. But what I am stating is that, from an examination of the records, there is no indication that was written down on paper.
Mr. KiESAU. That may be so.
Mr. Kennedy. That is the the point.
Senator Goldwater. Did you inform them of this in the formal meeting, or did you inform them individually ?
Mr. Kiesau. No. In the formal meeting.
Mr. Kennedy. Wouldn't something like that be contained in the minutes ordinarily? Something as serious as that?
Mr. KiESAu. Ordinarily it would be. But in the minutes of the organization, such as ours, we could not cross every "t" or dot every "i," But I can assure you that it was discussed and I am telling you that it was.
Mr. Kennedy, Could you consider this the crossing of a "t" or dot- ting of an "i" when somebody
Mr. KiESAu. No, I wasn't referring to it that way. What I meant was that everyone is human. It was not left out intentionally. There was no reason for it.
Mr. Kennedy. This was not just a small matter; this was a matter where an employee of yours was involved in an extortion.
Mr. Ejesau, That is correct.
Mr, Kennedy, I would think that would be something that would be kept in the minutes if they were kept accurate.
Mr. Kiesau. I understand Mr. Drake is to follow me, and he was present at the time. He conducted the meeting, and I am sure you can get him to testify on that same question.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12869
Mr. Kennedy. I am sure what you say about being discussed is correct. I am wondering why it was not put in the minutes. I think that is of even more interest. I would like to have you identify this letter.
The Chairman. The Chair hands you a photostatic copy of a letter dated March 2, 1951, addressed to Mr. Teitelbaum, and it appears to have been written by you as executive vice president of the Chicago Kestaurant Association.
Will you examine that photostatic copy and state if you identify the letter?
(The document was handed to the witness.)
(The witness conferred with his counsel.)
The Chairman. Do you identify the letter ?
Mr. KiESAu. Yes, sir.
The Chairman. It may be made exhibit No. 29.
(The document referred to was marked "Exhibit No. 29" for refer- ence and may be found in the files of the select committee.)
Mr. Kennedy. This is a letter, Mr. Chairman, dated March 2, 1951, addressed to Mr, Abraham Teitelbaum, Teitelbaum & Melnik, 20 East Jackson, Chicago, 111. :
Deab Mr. Teitelbaum : This letter is to advise you that our board of directors will not authorize the repayment of the $10,000 which you gave to the State's attorney's investigator, Mr. Dan Gilbert in 1950. As we discussed, probably the money was used in his political campaign for sheriff of Cook County. We understand that you needed him to help remove the pickets from the Regent Drugstore at the Sherman Hotel. Also, you told me that the demand by Mr, Gilbert was on the association. It has been the policy of the Chicago Restaurant Association, as you well know, that this expense, as well as expenses for union periodicals, subscriptions, dues, travel expenses, entertainment of union repre- sentatives and officials, strike expenses, hiring of additional attorneys, labor experts and all other expenses, in connection with your position as our labor counsel, are to be borne by you. These expenses are considered a part of your annual retainer fee. Your request for reimbursement is regretfully declined. Vei-y truly yours,
Chicago Restaurant Association, D. F. Kiesau,
Executive Vice President.
This is a letter in 1951 that would indicate that Mr. Teitelbaum told you that he had made a $10,000 payment to a city official. Is that correct ?
Mr, Keane. County.
Mr. Kennedy. Comity, thank you. A county official. Is that cor- rect, Mr. Kiesau ?
Mr. Kiesau. That is approximately it.
Mr. Kennedy, T\nien this matter was brought to your attention, did you do anything other than protest or say that the restaurant associa- tion would not pay it directly ?
Mr, Kiesau. I don't remember really too much about this particular letter other than the fact that Mr, Teitelbaum said that this is approxi- mately what happened.
It was presented to the board of directors, and the board of directors authorized me to write the letter.
Mr, Kennedy. Why wasn't Mr. Teitelbaum's services dispensed with immediately after you learned that he had made a $10,000 payment?
Mr. Kiesau. Again, that is something, Mr. Kennedy, that I had no control over.
12870 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You mean once again it is the board of directors? Mr. KiESAU. Yes, sir. . ^i u a
Mr. Kennedy. Mr. Chairman, could we have the names ol the board
of directors ?
They all knew about this? -,,.■,• .
Mr. Kiesau. Yes, sir. It was discussed at a board o± directors meeting. It says right here.
Mr. Kennedy. These are Chicago restaurant owners that knew about these situations and yet did nothing to dispense with the service of Mr. Teitelbaum?
Mr. Kiesatj. Yes, sir. . j, i ^ .- ^
The Chaieman. Do we have copies of the minutes ot that particular
meetino* ?
Mr. Duffy. Again, Mr. Chairman, on these minutes they do not reflect the people who were on the board of directors. They simply state the members who were in attendance at meetings.
Mr. KiESAU. You can get that information at any time.
Mr. Duffy. This was not discussed either in the minutes.
Mr. KiESAu. It is in the letter.
Mr Duffy. It is in the letter, but it is not in the minutes.
Mr. KiESAU. Well, that proves the fact, then, that everything does not get written in the minutes that actually happens.
Mr. Kennedy. It is very interesting, I think, that the two things we have found thus far that have not been in the minutes is, one, a bribe to a union official, and the other an alleged payoff to a county official.
Mr. KiESAU. I can't answer that. I am unable.
The Chairman. Who kept the minutes of these meetings?
Mr. Kiesau. I kept the minutes. I wrote the minutes.
The Chairman. You kept the minutes ?
Mr. Kiesau. Yes, sir.
The Chahiman. So then if there is any failure to record the pro- ceedings of the meeting accurately, the failure was on your part, was
it not? . ...
Mr. Kiesau. Senator McClellan, all minutes were always given to the president at the time to review. As far as I know, almost all of them — I would say all of them — there might have been a miss m 20 years. Not until the last year or two have I had the president initial the minutes which probably should have been done way back.
The Chairman. At any rate, you are the one that prepared the minutes ?
Mr. Kiesau. Yes, sir.
The Chairman. Kept the notes and wrote up the minutes ?
Mr. Kiesau. Yes, sir.
The Chairman. So if there is anything omitted that should have been in there, the initial failure would be on your part ?
Mr. Kiesau. Yes, sir.
The Chairman. And the next failure would be on the part of the president or chairman of the board not to detect the omission and have it inserted ; is that correct ?
Mr. Kiesau. Yes, sir.
The Chairman. Proceed.
Mr. Kennedy. Mr. Chairman, I would like to say in fairness to Mr. Gilbert that this was looked into by the Internal Kevenue Service, and
IMPROPER ACTIVITIES IN THE LABOR FIELD 12871
certain other Government agencies. They found that although Mr. Teitelbaum stated that he made this payment to Mr. Gilbert, they found no evidence that he ever did make the payment, but that he was just making a statement that he had made it. All the evidence was that he kept the money himself.
The Chairman. As I understand you, now, from the information the committee has, it does not necessarily mean that Mr. Teitelbaum's report on the transaction that he actually paid the money is true. Mr. Kennedy. That is correct.
The Chairman. In other words, it is indicated that it was not true, and he was simply undertaking to shake down the restaurant associa- tion that much further ?
Mr. Kennedy. That is correct. The Chairman. Proceed.
Senator Goldwater. Was that determination made from Internal Revenue reports? In other words, Mr. Gilbert didn't show $10,000 received ?
Mr. Kennedy, And the Internal Revenue Service and other Gov- ernment agencies investigated, and they became convinced from a review of their records that Mr. Teitelbaum actually was trying to shake down the association.
Senator Goldwater. Did Teitelbaum report the $10,000 ?
Mr. Kennedy. He attempted to, and they investigated and found •out from a review of his record that he had never made such a pay- ment. The point, however, is that as far as the restaurant association knew from their records, he had made such a payment. Still Mr. Teitelbaum was kept on as the representative for them in labor-man- agement relations.
The Chairman. In other words, the restaurant association, from the information it had, was bound to conclude, if they believed their ■counsel, that he had made the payment, and I assume they did be- lieve him at the time, although they declined to reimburse him for it, stating that any such expenditures w'ould have to come out of his own salary.
But notwithstanding that, knowing that he claimed he had made such a payoff, still your association retained him as its labor-relations ■counsel ?
Mr. Kiesau. Yes, sir.
The Chairman. All right. Proceed.
Mr. Kennedy. I wanted to ask you also about a third matter, and that is involving the London House, where Mr. Marienthal testified that Mr, Teitelbaum took steps to once again make payments to union officials, and he had discussed your problem and had come to you and said that he had had a problem with Mr, Teitelbaum. Were any steps taken after this was brought to your attention to dismiss Mr. Teitelbaum?
Mr. Kiesau. That wasn't a matter — you mean Mr. Teitelbaum pay- ing the dues as w^as testified ?
Mr. Kennedy. Yes.
Mr. Kiesau. That was never brought to my attention.
Mr. Kennedy. You never learned of that ?
Mr. Kiesau. I beg your pardon ?
Mr. Kennedy. You never learned of that ?
Mr. Kiesau. No. Mr. Marienthal testified to that, I believe.
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12872 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. KJENNEDY. He testified that he went to see you, but he wasn't sure whether he discussed the matter with you or not.
Mr. KiESAU. He testified that he called me several times on the phone, I believe.
Mr. Kennedy. But you say he never discussed the matter with you?
Mr. Kjesau. He never discussed the matter. He so testified last week.
Mr. Kennedy. My recollection was that his testimony was that he discussed the fact that he had to see Mr. Teitelbaum, but he was not sure as to whether he had discussed in detail the matter with you. But as far as your testimony is concerned, he never did discuss this with you ?
Mr. KiESAU. No, sir.
Mr. Kennedy. He never told you that Mr. Teitelbaum was paying the dues for these employees ?
Mr. KiESAU. That is correct.
Mr. Kennedy. What about the Howard Johnson Restaurant, Mr. Kiesau ? There we had a situation where the testimony was that some $2,240 was used to pay the dues on certain of the employees of the Howard Johnson Restaurant. Could you tell us what action you took against Mr. Teitelbaum on that ?
Mr. Kiesau. I beg your pardon ?
Mr. Kennedy. Could you tell us what action was taken against Mr. Teitelbaum for making any of those payments ?
Mr. Kiesau. That, Mr. Kennedy, was a case where Mr. Teitelbaum was injecting himself in the Howard Johnson Restaurant matter. I don't believe he was on the payroll at the time. He was trying to settle the matter. I don't know that this is exactly the same as the testimony that Mr. Strang gave, one of your first witnesses, but as I recall it, Mr. Strang called one day, and I had been out to his place on a number of occasions. I live not too far from the Howard John- son Restaurant.
He called one day and said, "I am told that I can settle the strike for approximately $2,000. What should I do?" I immediately got in touch with the management committee by telephone, asked them their opinions, and the essence or the gist of the conversation went like this : "If that is what Mr. Strang wishes to do, and it will remove the pickets, I think you ought to tell him that the association has no objection, if that is what he wants to do."
It was a fee that he paid to Mr. Teitelbaum, that he paid to Mr. Teitelbaum as an attorney fee.
Mr. Kennedy. You didn't know that that money in turn was being given to the union officials?
Mr. Kiesau. No, sir.
Mr. Kennedy. Were you present when the money was handed over ?
Mr. Kiesau. I believe I was at the restuarant the evening that Mr. Strang gave the check to Mr. Teitelbaum.
Mr. Kennedy. And that check was for $2,240, was it not ?
Mr. Kiesau. That is what I understand.
Mr. Kennedy. Were you present when Mr. Teitelbaum in turn en- dorsed that check over to Mr. Kerr ?
Mr. Kiesau. No, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12873
Mr. Kennedy. Did you discuss this with Mr. Kerr ?
Mr, KiESATJ. No, sir.
Mr. Kennedy. You didn't go outside while the check was passed?
Mr. KiESATJ. One evening, earlier in the week or 2 weeks before that, I don't remember exactly — I know what you are talking about — Mr. Teitelbaum, the only time that I can remember of anything like this happening, suggested that I meet Mr. Kerr. I was reluctant to do it. I will never forget it, because it was dark, it was in the evening. I think he was across the street, near a filling station. Pie begged and pleaded that I go over.
I agreed to do it. I talked to Mr. Kerr, I think, for about 3 minutes, 3 or 4 minutes, and came back to the restaurant. That was the only time I discussed anything with Mr. Kerr. That was previous to the settlement.
Mr. Kennedy. You knew that the check for the $2,240 was being made out to Mr. Teitelbaum ?
Mr. KiESAu. Yes, sir.
Mr. Kennedy. And you thought it was just for legal fees ?
Mr. KisEAu. As a retainer fee.
Mr. Kennedy. Did you know that these Howard Johnson Restau- rant employees were being brought into the union ?
Mr. KiESAu. No, sir.
Mr. Kennedy. Wlien did you learn of that ?
Mr. KiESAu. I didn't find that out until Mr. Strang sometime later, when it became a Treasury Department matter for him, told me of the endorsement on the check.
Mr. Kennedy. That was in 1955 ?
Mr. KiESAu. To the best of my knowledge.
Mr. Kennedy. You never learned before that ?
Mr. KiESAu. Not that I can recall.
Mr. Kennedy. You never learned that these employees were brought into the union ?
Mr. Kiesau. Well, I think I read in a publication, if you could say this was knowing of it, in a publication of the Hotel and Restaurant Employees Union, where they showed a picture of the strike and indi- cated below the caption that they had joined the union.
Mr. Kennedy. Did you inquire into that, then ?
Mr. KiESAU. No, because it didn't mean anything to me. I don't believe everything I read in a union publication. I don't believe everything I read in a newspaper.
Mr. Kennedy. I see.
The Chairman. I present to you here what purports to be a photo- static copy of minutes of the board of directors meeting held at the association's offices Friday, October 3, 1952. It appears to bear your signature as secretary of the meeting. I ask you to examine it and state if you recognize that as a photostatic copy of the minutes of the meeting which you prepared and sigiied.
(A document was handed to the witness.)
(Witness conferred with counsel.)
Mr. Kiesau. I just referred to this.
The Chairman. I just ask you if you identify that as a photostatic copy of the minutes of the meeting at that time ?
Mr. KiESAU. Yes.
21243—58 — pt. 34 2
12874 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. That copy may be made exhibit No. 30. (Document referred to was marked "Exhibit No. 30" for reference and may be found in the files of the select committee.)
Mr. Kennedy. I don't believe you referred to this, Mr. Kiesau. I believe you said you read in some magazine they were brought into the union.
This is in the minutes. Let's look back to the fact that we had in- formation regarding a payoff to a union official that wasn't in the minutes; that we had a supposed payoff to a county official which didn't appear in the minutes and yet we have here in the minutes of October 3, 1952 a statement "attention was called to the August 1952 issue of the Catering Industry Employee magazine which included an article on the unionization of the Howard Johnson Restaurant."
Mr. Kiesau. That is just exactly what I was referring to, before you showed me the letter. The magazine. I said that I don't recall of hearing about it unless it w^ere in a union restaurant publication.
Mr. Kennedy. Well, not only was it in the union restaurant publi- cation but it appeared in the minutes.
Mr. Kiesau. The minutes referred to the publication, Mr. Kennedy.
Mr. Kennedy. And these minutes are signed by you as secretary of the meeting.
Mr. Kiesau. Yes sir.
Mr. Kennedy. As you had been present when the payment had been made to Mr. Teitelbaum, and these employees were not supposed to be in the union did you inquire into it then, to find out whether Mr. Teitelbaum had made some payment to the union ?
Mr. Kiesau. Inquired into what?
Mr. Kennedy. When you found out that the Howard Johnson em- ployees w^ere, in fact, unionized, did you then inquire into how they became unionized ?
Mr. Kiesau. I assume that they had.
Mr. Kennedy. You were present when the payment of $2,240
Mr. Kiesau. It was definitely understood that it was a retainer fee.
Mr. Kennedy. Then how did they end up in the union ?
Mr. Kiesau. How did the restaurant employees? I don't think they ever ended up in the union.
Mr. Kennedy. When you put this into the minutes, so tliat it would appear as though the employees of the Howard Johnson Restaurants were in the union, did you ever inquire as to what the situation was, Mr. Kiesau ?
Mr. Kiesau. None other than what it indicates there.
Mr. Kennedy. Did you ever inquire into it any further to find out what the situation was, as you had been kept advised ?
Mr. Kiesau. I brought 'it to the attention of the board of directors.
Mr. Kennedy. Did you ever go back to find out, to have any con- versation with the Howard Johnson people?
Mr. Kiesau. Well, Howard Johnson— Mr. Strang was of exactly the same opinion that I was, that it had nothing to do with putting those employees into the union.
Mr. Kennedy. Did you discuss it with Mr. Teitelbaum ?
Mr. Kiesau. I don't recall. I may have.
Mr. Kennedy. Mr. Strang testified he didn't learn about it until 1955.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12875
Mr. KiESAU. I may have. I don't recall.
Mr. Kennedy. What did he say ? What explanation-
Mr. KiESAu. If I did, it could have been at the time that I saw the article in the Catering Industry Employee, or whatever the name of it is, but I can't say for sure whether I did or not.
Mr. Kennedy. Mr. Kiesau, you understood that this was a practice of Mr. Tietelbaum, did you not, to make payments to the union and then make an arrangement to bring in a certain percentage of the employees into the union ?
Mr. KiESAu. No, sir ; I did not.
Mr. Kennedy. You never knew about that ?
Mr. KiESAU. I did not know of it being a practice.
Mr. Kennedy. Did you know that he was doing it ?
Mr. KiESAu. No, sir.
Mr. Kennedy. You never knew he did that ?
Mr. KiESAu. Well, it depends upon when. I told you a little while ago that Mr. Johnson reported it to me 3 years after he had done it.
Mr. Kennedy. That was 1955.
Mr. KiESAu. Whenever that was.
Mr. Kennedy. And you never learned prior to that time?
Mr. KiESAu. I believe, thinking back to the testimony of last week, I believe I did know in the Esrig case that he had either suggested or Mr. Esrig did put some of the people in the union, or they had been unionized by the union, one of the two.
I am inclined to believe that it might be the latter because Esrig's Coffee Shop, or whatever the name of it was, was down in the milli- nery district, where they were highly unionized. If I am not mis- taken, the union legitimately had some employees in the union.
Mr. Kennedy. Didn't you know that this was a practice by Mr. Teitelbaum, and you knew that he was following this practice of making certain payments to the union in order to bring in, maybe, 7 or 8 or a certain percentage ?
Mr. KiESAU. I can't answer that, Mr. Kennedy, knowing it was a practice.
Mr. Kennedy. You knew it was going on, did you not ?
Mr. Kiesau. I didn't know. If I knew it was a practice, I would know it was going on.
Mr. Kennedy. Did you know it was going on ?
Mr. KiESx\u. I didn't know. I told you that I didn't know it was going on except that a couple of the situatioriS likely mentioned.
Mr. Kennedy. Did you take any steps then to dismiss Mr. Teitel- baum when you found out about it ?
Mr. KiESAu. That was a matter for our board of directors. I work for the board of directors.
Mr. Kennedy. Did you inform the board of directors that this type of thing was going on ? Mr. KiESAU. Usually an employee doesn't tell his board of directors. Mr. Kennedy. You learned something about Mr. Teitelbaum's practices.
Mr. KiESAU. So did they.
Mr. Kennedy. They knew about it ?
Mr. Kiesau. They knew everything that I knew.
12876 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Did you inform them?
Mr. KiESAu. Well, they testified
Mr. Kennedy. Just answer the question. Did you inform them?
Mr. KiESAU. Yes, sir.
Mr. Kennedy. You did ?
Mr. KiESAu. Yes.
Mr. Kennedy. Now I show you a letter of July 21, 1950.
The Chairman. The Chair presents to you a photostatic copy of a letter of July 21, 1952, addressed to Mr. Teitelbaum. Apparently the letter was written by you. Will you examine it and state if you identify it?
(Document was handed to the witness.)
(Witness conferred with counsel.)
The Chairman. Did you identify the photostatic copy of the letter ?
Mr. KiESAU. Yes, Mr. Senator.
The Chairman. That may be made exhibit No. 31 for reference and may be found in the files of the select committee.
Mr. Kennedy. I would like to read this letter into the record. July 21, 1950, Mr. Abraham Teitelbaum, signed by D. F. Kiesau, executive vice president of the Chicago Kestaurant Association.
Dear Mr. Teitelbaum : This is in reply to your inquiry as to the arrangements made from time to time in the past concerning your retainer as counsel to the Chicago Restaurant Association. Permit me to state the following facts : You were retained as labor counsel for the Chicago Restaurant Association in 1939, at which time your retainer fee was $15,000, plus $5,000 per year to be used as out-of-pocket expenses in connection with traveling, union meetings, entertain- ment, incidentals, et cetera. Subsequently, your retainer was raised to $20,000 per year, together with the additional $5,000 per year as expenses, et cetera. In the past years, prior to 1949, you received sums of money at or about Christmas each year, ranging from $2,000 to $8,000 in addition to the above retainer and expenses allowed. While the latter was in the nature of a gift, it was intended to augment your expense account as the pressure became greater due to union contributions, hotel and traveling exi>enses necessitated when you moved to Cali- fornia, and were required to make additional trips to and from California by reason of the association's urgent demands for your services not originally con- templated. You have always advised us that the expenses we gave you in addition to the basic retainer was not sufficient. We know that unless you had received tliese increases in expenses from time to time, you would not have been able to carry on the splendid work performed by you for our association.
What is the "pressure became greater due to union contributions" ? What does that refer to, Mr. Kiesau ?
Mr. Kiesau. As I recall in this entire letter
Mr. Kennedy. That is of July 21, 1950.
Mr. Kiesau. This was a matter that Mr. Teitelbaum had discussed with me, and asked if we could give him a letter, the gist of which is incorporated in here. I discussed it again with the manage- ment committee. In this case, I do not recall whether it was by telephone or at a meeting. I am inclined to believe that it was by telephone. It was seeking authority to write this letter, and it was given to me, and the letter was written accordingly.
The gist of the letter was in accordance with his conversation with me.
Mr. Kennedy. It would appear very clear from this letter that as far back as July 1950 you were aware that he was making these pay- ments to these unions.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12877
Mr. IviESAU. Well, I did not understand. As it looks now in print "Due to the union contributions" — I might have assumed that that was contributions for advertising and their publications, which many of the locals have. They all get out their little dance book or pro- gram book and go around to different restaurants and ask them for advertising. I probably thought of it at the time that that was it. I am not sure.
Mr. Kennedy. Did you think that Mr. Teitelbaum was making payments in that connection ?
Mr. KiESAU. No, sir.
Mr. Kennedy. Well, then, this states clearly, "Pressure became greater due to union contributions," and this is what Mr. Teitelbaum, according to the sworn testimony before our committee, was doing all this period of time. He was making the payments for the various members of the restaurant association to the union.
Mr. Kiesau. In the one case he made a payment to Trungell that we knew about, and then we stopped.
Mr. Kennedy. This was back in 1950. Did you draw this to the attention of the restaurant association board of directors ?
Mr. IOesau. I am not sure about the board of directors in this case, Mr. Kennedy, but the management committee knew about it.
The Chairman. Tell us about the management committee. Is that a committee of the board of directors ?
Mr. Kiesau. The management committee is a sort of interim com- mittee between the board of directors' meetings with power to act on behalf of the board of directors.
The Chairman. That is what I assumed. But is it composed of members of the board of directors ?
Mr. I^ESAU. Yes, sir.
The Chairman. In other words
Mr. Kiesau. It is a part of the board.
The Chairman. You have the board which has the overall man- agements, and then it delegates authority to a committee, a manage- ment committee, to act in the interim between board meetings?
Mr. Kiesau. That is right. And invariably. Senator McClellan, it is the older members, the people who have either been past presi- dents or active in the association for many years.
The Chairman. You said you had about 23 menibers of the board. How many of them compose the management committee ?
Mr. Kjesau. Between 4 or 5.
The Chairman. Some 4 or 5 of them were designated as the man- agement committee ?
Mr. Kiesau. That is correct.
The Chairman. All right. I am trying to get the structure of it.
Mr. Kiesau. Including the president, who is ex officio.
Mr. Kennedy. Then, of course, this other letter, Mr. Chairman, exhibit 29, dated March 2, 1951, the last paragraph says- It has been the policy of the Chicago Restaurant Association, as you well know, that this expense, as well as expenses for union periodicals, subscrip- tions, dues —
What does that refer to, dues ? Mr. Kiesau. The same thing.
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IMPROPER ACTmTIES IN THE .ABOR FIELD
12877
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Mr. IviESAU. Well, I did not understail. As it looks now in prmt "Due to the union contributions"— I light have assumed that that was contributions for advertising and leir publications, which many of the locals have. They all get out the little dance book or pro- gram book and go around to different restarants and ask them for advertising. I probably thought of it at 1 3 time that that was it. I am not sure.
Mr. Kexxedy. Did you think that Mr. ^eitelbaum was making payments in that connection ?
Mr. KiESAU. Xo, sir.
Mr. Kexxedy. Well, then, this states ckrly, "Pressure became greater due to union contributions," and thiss what Mr. Teitelbaum, according to the sworn testimony before ourommittee, was doing all this period of time. He was making the pyments for the various members of the restaurant association to the uion.
Mr. KiESAU. In the one case he made a pyment to Trungell that we knew about, and then we stopj^ed.
Mr. Kexxedy. This was back in 1950. Id you draw this to the attention of the restaurant association board c directors ?
Mr. KiESAU. I am not sure about the bord of directors in this case, Mr. Kennedy, but the management ccimittee knew about it.
The Chairmax. Tell us about the manageisnt committee. Is that a committee of the lx)ard of directors?
]\rr. Kiksau. The management committee ia sort of interim com- mittee between the board of directors' meetii^s with power to act on behalf of the board of directors.
Tlie C'ii.\iR>rAx. That is what I assumed. But is it composed of membeis of the board of directoi*s?
Mr. KiESAU. Yes, sir.
The CiiAiHMAX. In other words
Mr. KiESAU. It is a part of the board.
The CiiAiKMAX. You have the board whic has the overall man- agements, and then it delegates authority to committee, a manage- ment committee, to act in the interim betwee board meetings?
Mr. KiESAU. That is right. And invarialy. Senator McClellan, it is the older members, the people who have-ither been past presi- dents or active in the association for many year
The CiiAiRMAX. You said you had about 23nembers of the boarr' How many of them compose the management cmmittee?
Mr. KiESAU. Between 4 or 5. ^ta_
The CiiAiKMAX. Some 4 or 5 of them were agement committee?
Mr. KiESAU. That is correct.
The CiiAiRMAX. All right. I am tr
Mr. KiESAU. Including the presij
Mr. Kennedy. Then, of coi exhibit 29, dated March 2, 1951'
It has been the policy of know, that this exi>ense, a tions, dues —
What does tliat refer Mr. KiESAL . The 8;
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12878 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Dues of what?
Mr KiESATi. I don't know. , , ,i
Mr! Kennedy. You wrote the letter. I am asknig you about both
"" MfKit^IS' That was approximately the way he discussed it^with me I don't know what dues he paid, unless it were the dues for Sample that developed in testimony last week m the case of London
""S'Ch'ikC" W^^^^ that be paying dues into a local for a given numbei of members so as to keep the plant or establishment from beino-oro-anized? Is that what you mean ? .-p t ^ i .
M? KiEslu Senator McClellan, the case that was testified to last week was the only case that I had ever heard of him paying any union
""The^CHAiRMAN. That is what happened in the Strang incident. Mr.KiESAU. Whatisthat? . . .-, c. • -^ „f
The Chairman. That is what happened m the Strang incident. Mr. KiESAU. That was not. Mr. Strang paid that and it was a re-
The Chairman. You saw the endorsement. You know how it was handled. It went to the union.
Mr. KiESAU. At the time we did not. -^ , -r i -s^ .-u-
The Chairman. I am not saying you did. But I wonder it this refers to similar transactions, where he was paying out this money ana setting up a certain number of employees, designating them as union members and paying their dues. You refer to dues. I can t under- stand what else it would be except paying dues for some establish- ment on a given number of employees to prevent unionization. Mr. KiESAU. I don't know of any other. ^ ^.^ , i
The Chairman. Obviously that is the way the $2,240 check was handled. You know that now.
Mr. KiESAU. Yes, sir. ^ ^t .-
The Chairman. This would indicate that you knew at the time that he was also paying dues, that you were covering by the re- tainer fee. Mr. KiESAU. I knew at the time ?
The Chairman. Well, the letter indicates that. You refer to dues. Have you any other explanation than that he was actually paying
dues on some people ? , • i • j.i, a.
Mr. KiESAU. It didn't even occur to my thinking at the time that he was paying any union dues.
The Chairman. What did you have in mind when you used the word "dues"?
Mr. KiESAU. That was an expression that he used, union publica- tions, union dues, entertainment.
The Chairman. AVell, you don't call entertainment "dues." "Wliat else is included
Mr. KiESAU. I think entertainment is included in here.
The Chairman. Well, yes, you covered a number of things, includ- ing this. You specified entertainment and other things and then you specified union dues.
Mr. KiESAU. I believe, Senator McClellan, they were his words.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12879
The Chairman. They may have been his words. If lie said some- thing to you about union dues, what do you think he meant «
Mr KiESAu. At the time I didn't think that it was like the Marien- thai dues, 1 assure you.
The Chairman. You just didn't think It is bound to have made some impression on you. Here is the director or manager or execu- tive vice president of this association, and you are talking about union dues. I can hardly conceive that it would not be clear in your mind what was meant by union dues.
Mr. KiESAu. Many things that Mr. Teitelbaum said were never fully explained or understood by me. Senator McClellan. I still only know ot one case where there was payment for union dues, and I learned that here.
The Chairman. I just don't quite understand. Union periodicals subscriptions, dues, travel expenses, and so forth. I can't understand wliy you wouldn t have, at the time, known what he meant by dues
Or what you meant when you used the term "dues." Do you know now what you meant then ?
Mr. IviESAu. Based upon the one case involving the London House I do. '
If that is what the reference was to. But I did not understand it to be at the time.
The Chairman. All right, Mr. Kennedy, proceed.
Mr. Kennedy, Here is another letter, Mr. Chairman.
The Chairman. In this previous letter— well, the letter we have been talking about was March 2, 1951. Back some 9 months earlier, in July 1950, you used the term- it was intended to augment your expense account as the pressure became greater due to union contributions.
What did you mean by union contributions? It seems back there then you knew he was making some kind of contributions to unions. In the next letter, 9 months later, it refers to union dues.
Mr. KiESAiT. My answer to that would be exactly the same as it was tor the union dues. That is, that we just discussed. It is exactly the same situation.
The Chairman. Well, you were augmenting his expense account and
^^tT?^ T "^ ^^'^^^ ^^ ^^^^^' ^^^^^^ things, obviously. Isn't that correct?
Mr. KiESAu. I assume that is it.
The Chairman. Well, isn't that it ?
Mr. KiESAu. Yes, that is it.
The Chairman. Without assuming, that is a plain fact about it, isn't it?
Well, when you go to increase a payment, either salary, retainer, or tor expenses, you generally know, and I would think as an administra- tive official of an association you would want to know, what expense was included in the increase being granted. That is, unless you just had a general understanding he was to go out and do anything, what- ever is necessary, bribe or anything else, in order to handle the affairs or the association.
You don't want to leave that implication, do you ? _ Mr. KiESAu. Well, these matters of bonuses and/or gifts that were given to Mr. Teitelbaum at the end of the year were determined by the board of directors.
12880 IMPROPER ACTIVITIES, IN THE LABOR FIELD
The Chairman. I can appreciate that.
Mr. KiESAU. I had nothing to do with that.
The Chairman. But you had knowledge of it.
Mr. Kjesau. Yes, sir, I did have knowledge of it.
The Chairman. You are bound to have.
Mr. KiESAU. But whatever knowledge I had, it still would not make any difference, because the board of directors acted upon it.
The Chairman. Maybe it didn't, but we want to know what that knowledge was. It might make a little difference to us.
Mr. KiESAU. Well, whatever it was, the board of directors were thoroughly acquainted with it. There was nothing ever done— —
The Chairman. In other words, if it was to be used for a bribe, you would say they knew it?
Mr. KiESAU. If that were the facts.
The Chairman. If it was to be used to pay dues as a pay off, the board of directors knew it, is that what you are saying?
Mr. KiESAU. I don't think so, no, sir.
The Chairman. You said they knew what it was for. We are just trying to find out.
Mr. KiESAU. I said if they knew.
The Chairman. I thought you said— well, if you knew and it they knew and if neither of you knew, then you were operating with pretty loose management, were you not ?
Mr. KiESAU. I would still have to answer that this way, that these matters were determined by a board of directors.
The Chairman. I understand they were. But I say that they cer- tainly knew what was meant at the time they ordered the increased payments. I would think they knew. Do you say they did know or
did not know? ^r r^^ ^
Mr. KiESAU. I don't know what you are thinking, benator McClei- lan, that they are. How can you tell what I am thinking that they are. I did not know. . . .
The Chairman. Well, if I have somebody employed— it is ]ust as simple as this— and he comes in and says "I have to have more money," and then I would say "What for?" I certainly would try to find out. Any businessman would do that. I would think I knew, at least, what the increases were being paid for, and if you used the term "union dues" or "union contributions," I think before I would grant the increase and pay out the money I would know what was meant by it. I assume that men who run restaurants and who operate restaurant associations, who serve on boards that operate it, and who serve as executive vice presidents of such associations, I assume they would know at the time, or I would think they knew.
All I am trying to find out is this, that these terms carry with them an implication that there was a payoff of some nature to unions.
Mr. KiESAu. Senator McClellan, I never knew of any payoff. This was approximately
The Chairman. All right. Proceed.
Mr. I^NNEDY. Mr. Chairman, the record shows that on July 8, 1949, the retainer was increased from $25,000 to $54,000.
The Chairman. I hand you here what purports to be photostatic copies of minutes of the board of directors' meeting held at the asso- ciation offices, Friday, July 8, 1949, at 10 : 30 a. m. It appears to be
IMPROPER ACTIVITIES IN THE LABOR FIELD 12881
signed by you as secretary of the meeting. Will you please examine that?
Mr. Kennedy. He identified them.
Mr. Keane. They have the minutes and we know what is in them.
The Chairman. Then it may be made exhibit No. 32.
(The document referred to was marked "Exhibit No. 32" for refer- ence and may be found in the files of the select committee. )
Mr. Kennedy. It is correct that that increased Mr. Teitelbaum's retainer from $25,000 to $54,000 ?
Mr. KiESAu. Yes.
Mr. Kennedy. On April 6, 1950, he was increased again to $125,000?
Mr. Kiesau. Correct.
The Chairman. He started out at $25,000 a year. When was he first employed ?
Mr. KiESAU. I think he started out at $20,000 in 1938 or 1939.
The Chairman. $20,000 in 1938 or 1939 ?
Mr. Kiesau. I believe so.
The Chairman. Now we find here — what was the date it was raised from $25,000 to $54,000 ?
Mr. Kennedy. 1949.
The Chairman. In 1949 his retainer was raised from $25,000 to $54,000. Is that correct ?
Mr. Kiesau. That is correct.
The Chairman. And then in April 1956, a few months later
Mr. Keane. 1950.
The Chairman. 1940. I am sorry. A few months later, he was raised from $54,000 to $125,000 ; is that correct ?
Mr. Kiesau. That is correct.
The Chairman. He must have really been a performer to get such substantial increases as that.
All right. Proceed.
Mr. Kennedy. Were Mr. Teitelbaum's services dispensed with be- cause of any of these activities, any of these kinds of payments.
Mr. Kiesau. I don't understand your question.
Mr. Kennedy. Were Mr. Teitelbaum's services dispensed with be- cause of any of these kind of activities, any payments to unions ?
Mr. Kiesau. They were dispensed with in the case of a strike.
Mr. Kennedy. Was it because he was unable to stop a picket line at the Marquis Restaurant ?
Mr. Kiesau. It was generally understood that the attorney was retained to prevent a strike in those situations where the union was coercively picketing.
Mr. Kennedy. So where he was unable to stop a picket line, that was the reason that his services were dispensed with ?
Mr. KisEAu. That was generally the case with all the attorneys.
Mr. Kennedy. As far as Mr. Teitelbaum, and we are just talking about him at this time, his services were dispensed with because he was unable to stop a picket line at the Marquis Restaurant ?
Mr. Kiesau. That's correct.
Mr. Kennedy. Then the Chicago Restaurant Association hired Mr. Champagne, is that correct ?
Mr. Kiesau. That is correct.
12882 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. What did you know about Mr. Champagne's back- ground as far as labor-management experience ?
Mr. KiESAu. I did not know anything about Mr. Champagne's labor-management background. I believe that Mr. Drake is to follow me on the stand
Mr. Kennedy. I am just asking you.
Mr. KiESATT. I knew nothing.
Mr. Kennedy. Did anybody ever tell you that he had any expe- rience in labor-management relations ?
Mr. KiESAU. No ; they did not.
Mr. Kennedy. What were you told as to his experience ?
Mr. Kiesau. Nothing was told to me about his experience.
Mr. Kennedy. Did you know that he, like ]VIr. Teitelbaum and Mr. Komano had many associates in the underworld in Chicago?
Mr. KiESAu. I did not know that.
Mr. Kennedy. Ultimately, Mr. Champagne resigned some 7 or 8 months later ?
Mr. Kiesau. That is correct.
Mr. Kennedy. He was able to settle the Marquis strike within about a week after he was retained ?
Mr. Kiesau. Yes, sir.
Mr. Kennedy. Do you know how he was able to do that if he had no experience ?
Mr. Kiesau. No ; I don't.
Mr. Kennedy. Then following him was Mr. Teitelbaiun brought back for a short period of time ?
Mr. Kiesau. I think so.
Mr. Kennedy. And subsequently you retained Mr. Gutgsell ?
Mr. Kiesau. That is right. Mr. Kennedy. And Mr. Gutgsell's services were dispensed with when he was unable to prevent a picket line ?
Mr. Kiesau. That is correct.
Mr. Kennedy. Wliat restaurant was that ?
Mr. Kiesau. That was the Nantucket.
Mr. Kennedy. That was despite the fact that Mr. Gutgsell had found that the employees at the Nantucket Restaurant were inter- ested in joining the union ?
Mr. Kiesau. I beg your pardon.
Mr. Kennedy. That was despite the fact that Mr. Gutgsell had found that the employees at Nantucket were interested in joining the union ?
Mr. Kiesau. I believe that is not a correct statement.
Mr. Kennedy. That is Mr. Gutgsell's testimony. ^ Mr. Kiesau. I don't believe that he said that he had checked any signatures. He said that Mr. — I believe, and I stand corrected — that he had been informed by the union that they had 19 cards.
Mr. Kennedy. Eight, and he had seen the cards.
Mr. Kiesau. He said he had looked at them, but I don't believe that he indicated that he had verified the signatures or anything, as counsel for Mr. Reed.
Mr. Kennedy. He said that the union was prepared to have an exam- ination made of the cards.
Mr. Kiesau. That is right.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12883
Mr. Kennedy. And yet no steps were taken either by the Nantucket Kestaurant or the Chicago Eestaurant Association to have an exam- ination made of the cards.
Mr. KiESAu. That is correct.
Mr. Kennedy. A strike was called by the miion.
Mr. KiESAU. That is right.
Mr. Kennedy. And when the picket line appeared, Mr. Gutgsell's services were dispensed with ?
Mr. KiESAU. That is right. I think we ought to mention for the sake of the record that only 13 employees went out on strike.
Mr. Kennedy. These individuals were all paid out of the volun- tary fund, the labor relations consultants ?
Mr. KiESAU. To support the individual in the case of this type of picketing, they were all paid
Mr. Kennedy. Just answer the question.
Mr. KiESAU. I misunderstood your question.
Mr. Kennedy. Were the counsels that were retained, Mr. Teitel- baum, Mr. Champagne, and Mr. Gutgsell, paid out of the voluntary fund?
Mr. KiESAu. The voluntary contribution fund.
Mr. Kennedy. Do the nonunion restaurants contribute more to the voluntary fund ?
Mr. KiESAU. Yes, sir.
Mr. Kennedy. They contribute how much ?
Mr. KiESAU. Well, that has varied over the years.
Mr. Kennedy. IIow much are they contributing now ?
Mr. KiESAU. The nonunion restaurants are contributing $1 per month per employee. Those that are voluntarily participating.
Mr. Kennedy. And how much for union ?
Mr. KiESAU. The union restaurants are, at this moment, since last December, are not participating.
Mr. Kennedy. Well, how much were they contributing ?
Mr. KiESAU. They were contributing — I believe the ratio has always been approximately 50 percent.
Mr. Kennedy. So the nonunion restaurants contribute twice as much as the union restaurants ?
Mr. KiESAU. That is correct.
Mr. Kennedy. I would think that the union restaurants would have far more to do with unions than nonunion restaurants.
Mr. KiESAU. No, Senator Kennedy
Mr. Kennedy. Mr. Kennedy.
Mr. KiESAU. Mr. Kennedy. I am sorry. I am very sorry. The union restaurants use a counsel only when contracts expire, which might have been anywhere from 12 months apart to 2 years apart, so counsel is only used primarily for that, unless there was a local dis- turbance of some kind or disagreement between management and the union and so forth in the union houses. n • ?<.
Mr. Kennedy. And the nonunion might not use them at all ; isn t that correct ?
Mr. KiESAu. That is very much correct.
Mr. Kennedy. It would appear, Mr. Kiesau, that certainly the as- sociation is not in any better moral position than the unions them- selves, in view of the retaining of Mr. Teitelbaum with his criminal
12884 IMPROPER ACTIVITIES IN THE LABOR FIELD
background and the retaining of Mr. Champagne with his criminal background, the association with Mr. Romano, and then, of course, Mr. Champagne's association with this number of individuals, in- cluding his payments to Mr. English. And then also, the association was aware back in 1950 that Mr. Teitelbaum was making payments not only to union officials but allegedly to a county official, which would have been a crime; and you wrote letters which would indicate that you were aware of the fact then that he was making a practice of mak- ing payments on these dues.
There are 6 or 7 matters there that would indicate that the position of the restaurant association is certainly not any better than the posi- tion of the union in all of these matters. You can make any com- ment on that that you would like.
Mr. KiESAU. I would never agree to that.
Mr. Kennedy. Well, you would agree that you hired Mr. Teitel- baum ; isn't that correct ?
Mr. KiESAU. Yes, sir ; the association did.
Mr. Kennedy. All right, the association hired Mr. Teitelbaum. The association knew also that Mr. Teitelbaum was hiring Mr. Louis Romano ; isn't that correct ?
Mr. KiESAU. Mr. Teitelbaum hired Mr. Romano.
Mr. Kennedy. And both Mr. Romano and Mr. Teitelbaum had many criminal associates in the underworld in Chicago. You are aware of that ?
Mr. KiESAU. I am not aware of the facts on that matter.
Mr. Kennedy. You were aware of it generally ?
Mr. Kiesau. I have read about it in the papers.
Mr. Kennedy. Then you knew, according to your own correspond- ence, that Mr. Teitelbaum had said he was paying off a county official, $10,000 ? You were aware of that ?
Mr. KiESAU. Whatever is in the letter.
Mr. Kennedy. And were you aware of the fact that in another instance a payment of $150 extortion had been paid by Mr. Teitel- baum, with his concurrence, and that was in 1949 ?
Mr. KiESAU. Yes, sir
Mr. Kennedy. Then the association hired Mr. Champagne ?
Mr. KiESAU. That is right.
Mr. Kennedy. And with all of his associations. Those are the matters that I have mentioned. Then, of course, there are two other letters that we have discussed that will have to speak for themselves.
The Chairman. Mr. Kiesau, how much of the $125,000 a year paid as a retainer fee for attorneys was used or was to be used to pay off these union officials, to prevent unionization of restaurants ?
Mr. Kiesau. I have no knowledge of that. Senator McClellan.
The Chairman. Well, isn't that the reason that the fee was made so exorbitant ?
Mr. Kiesau. Not that I know of.
The Chairman. Did you ever get a report from Teitelbaum, Cham- pagne, or Gutgsell that they were paying out this money for that purpose ?
Mr. Kiesau. No, sir.
The Chairman. Was it ever discussed ? It may not appear in the minutes, but was it discussed in your presence ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12885
Mr. KiESAU. No, sir ; never.
The Chairman. Did you require an explanation or a detailed ac- counting of the expenses that they were out ?
Mr. KiESAu. No, sir.
The Chairman. In other words, they used their own conscience and own judgment, "Here is a lump sum, you keep us from being unionized, our members of this association, and as long as you do that, you can take this money and handle it any way you want to." Is that it ?
Mr. KiESAu. I don't think that is
The Chairman. Well, when they failed, you fired them.
Mr. KiESAU. That is correct.
The Chairman. That was the purpose of your hiring them.
Mr. KiESAu. The general understanding was that they were sup- posed to prevent employers from putting people in the union.
The Chairman. Well, you found he did put some in and you didn't fire him for that, because he kept down a strike.
Mr. KiESAu. I didn't have the determination for it.
The Chairman. Your association did not fire him for that?
Mr. KiESAu. That is correct.
The Chairman. Obviously, it approved that, so long as he got results.
Mr. KiESAU. We didn't know that. Senator McClellan.
The Chairman. You knew it afterward.
Mr. KiESAU. Knew it afterward, a long time afterward. In the Johnson case, it was 3 years.
The Chairman. You continued to retain him after you knew it; your association did.
Mr. KiESAU. Afterward ; yes, sir.
The Chairman. And you did not fire him until he failed.
Mr. KiESAU. Well, I think 1953 would have been about the time that he was let go, which was approximately 3 years after the Les Johnson case.
The Chairman. All right.
Is there anything further ?
Mr. ICennedy. You had some financial transactions with Mr. Teitel- baum yourself ?
Mr. KiESAU. Yes, sir.
Mr. Kennedy. You made loans to him ?
Mr. KiESAU. Yes, sir.
Mr. Kennedy. Starting in 1949 ?
aTt* Tvtesatt Y^gs sir
Mr'. Kennedy. $30,000 in 1949, was it? $25,000?
Mr. KiESAU. You have the figures.
Mr. Kennedy. $30,000 in 1949.
Mr. KJEANE. He has the figures.
Mr. Kennedy. Do you have the figures ?
Mr. KiESAU. I believe it was $25,000 in 1949.
Mr. Kennedy. How much in 1950 ?
Mr. KiESAU. In 1950, $25,000 on two different occasions.
Mr. Kennedy. Twice $25,000?
Mr. Kiesau. That is right.
Mr. Kennedy. And then 1951 ?
12886 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. KiESAU. 1951, two different occasions.
Mr. Ki:NNEDY. How much? . inKi
Mr KiESAu. In 1951, $13,750, and $15,000 the second time m 1951. Mr, Kennedy. You got a $5,000 interest payment on the loan m
1949?
Mr.KiESAU. $5,000 ; that IS cx)rrect.
Mr. Kennedy. And how long was the loan m existence «
Mr.* KiESAU. I believe it was in existence about 4 months.
Mr*. Kennedy. You got $5,000 interest on that loan ?
Mr. Kiesau. That is what he offered me for makmg the loan. 1 hat
is correct. n ^ ^ a
The Chairman. What was the amount of the loan <
Mr. Kiesau. $25,000.
The Chairman. $25,000 for how long?
Mr Kiesau. I believe it was about 4 months.
The Chairman. Four months; and you got $5,000 interest?
Mr. Kiesau. That is correct.
Mr. IvENNEDY. What did he use the money for ?
Mr. Kiesau. I don't have any idea. , .^j: ,
Mr. Kennedy. Did you ask him what he was going to use it tor i
Mr. Kiesau. No; I didn't. -n-, ^u.,
The Chairman. Do you know anyone else who will do that «
Mr Kiesau I know Mr. Teitelbaum borrowed money from many people, many restaurant people, I believe he also made a loan from the association once. I think the records so indicate. He made a loan from some of the directors of the association.
Mr. Kennedy. How much did you get back on the loan that you made for $25,000 on February 3, 1950 ?
Mr. Kiesau. $2,500.
Mr. Kennedy. How long was that out ?
Mr.KiESAU. That loan was about 5 or 6 months.
Mr. Kennedy. You did very well with Mr. Teitelbaum personally ^
Mr.KiESAU. No; I didn't.
The Chairman. Were you making these loans personally ?
Mr. Kiesau. No ; I did not— excuse me ?
The Chairman. Let me ask you. These were personal loans that you made to Mr. Teitelbaum ?
Mr. Kiesau. Yes, sir ; they were personal loans.
The Chairman. All right. Go ahead. . , ^^t, o
Mr. Kennedy. Did you want to make some statement about them «
Mr. Kiesau. No ; that is all._
Mr. Kennedy. I guess that is all.
The Chairman. Are there any further questions ?
Mr Kiesau. I would like to mention, though, that the 2 loans that were made in 1951 there was no interest rate or nothing offered for making the loans. . .■,.<)
Mr. Kennedy. Wliy didn't you get any interest on that i
Mr.KiESAU. I beg your pardon? , . ^, ^ q
Mr Kennedy. Why didn't you get some interest on that one ?
Mr. Kiesau. Maybe I was trying to even out from what was paid before. I can't tell you. , ^ ^ ^ ^<?
Mr. Keane. Mr. McClellan, may I make a short statement (
The Chairman. All right. We will hear you briefly.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12887
Mr. Keane. I believe your staff can tell you that the association has b^n fully cooperative m the investigation. We have turned over our office to you, all of the files and records and minutes and financial statements, everythmg they had. They had the complete run of the ofhce and we have given them every bit of cooperation. I think that ought to be on the record.
The Chairman. All right. We accept your statement and for the cooperation and assistance you have given, the association and of- ficials and anyone else, the committee is always grateful. We have a tough assignment here, and when we get a little help instead of ob- struction and hindrances, we are grateful for it. Stand aside.
Call the next witness.
Mr. Kennedy. Mr. George Drake.
The Chairman. Be sworn, please. You do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God?
Mr. Drake. I do.
TESTIMONY OF GEORGE T. DRAKE, ACCOMPANIED BY COUNSEL, WILLIAM J. LANCASTER
The Chairman. State your name, your place of residence, and busi- ness or occupation.
Mr. Drake. My name is George T. Drake. I reside at 143 Sheridan Road, Kenilworth, 111. I am a restaurateur in the city of Illinois, and also in the village of Willamette, 111.
The Chairman. A restaurant owner and operator?
Mr. Drake. Yes, sir.
The Chairman. What are your connections with the Chicago Restaurant Association ?
Mr. Drake. At the present time I am an ex-president and remain a permanent member of the board.
The Chairman. You have counsel with you ?
Mr. Drake. Yes, sir ; I do.
The Chairman. Counsel, identify yourself for the record.
Mr. Lancaster. William J. Lancaster, 111 West Washington Street, Chicago, 111., a member of the Illinois bar.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Drake, you were president of the association during what period of time?
Mr. Drake. That is, I believe, from April of 1949 until April of 1954. ' 5 F F
Mr. Kennedy. Did you have any official position with the restau- rant association prior to 1949 ?
Mr. Drake. I belonged to a couple of minor committees, I believe, prior to that. I don't recall exactly what they were.
Mr. Kennedy. Could you tell the committee why the restaurant association took no steps to dispense with the services of Mr. Teitel- baum when it was brought to their attention that he was involved in the extortion of the Nantucket Restaurant and you were president of the association ?
12888 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr Drake. At that time we did take the one step that has been testified to here, as far as forcing Mr. Teitelbaum to pay the money back. I do recall that he was admonished by the board, and he more or less promised and said that he would not enter mto that type of arrangement again. ^ ^ , ji ^ u
Mr Kennedy. What about the $10,000 payment supposedly to be paid to the county investigator, Mr. Dan Gilbert? ^^ , . „
Mr Drake. Could I look at that letter, please, Mr. Kennedy, again i
The Chair presents to the witness exhibit No. 29 for his examina- tion.
(The document handed to the witness.)
(The witness conferred with his counsel.)
Mr. Drake. I believe as stated in that first paragraph, it was our opinion that that had been a political contribution.
Mr. Kennedy. Let's make sure that you understand it. It says, "We understand that you needed him to help remove the pickets from the Regent Drugstore at the Sherman Hotel." -r j ^x
Mr. Drake. I don't recall that part of it, Mr. Kennedy. I don t recall as to that part of the statement before the committee or whether it was something that Mr. Kiesau had or that Mr. Teitelbaum had talked about to Mr. Kiesau.
I could recall the $10,000 payment. I do recall that it was con- sidered by us a political contribution. Many of us make political contributions in the city of Chicago to public officials, and for their
campaigns. .^ , , , .^ j: ^^ ^ 4.
Mr. Kennedy. Mr. Kiesau just testified that he gave the lull tacts to you and to the other members of. the board of directors, and this was to get rid of a picket line, and you people were aware of that.
Mr. Drake. I do not accept that statement. No, it was not.
Mr. Kennedy. Mr. Kiesau just testified to that.
Mr. Drake. He wrote that letter, Mr. Kennedy.
Mr. Kennedy. He testified under oath that he told you all the facts in this matter. -r u ^i, j.
Mr. Drake. I did not hear him. He may have. I told you that I do not recall that part of it, sir.
Mr. Kennedy. You never saw this letter before ?
Mr. Drake. I wouldn't say "Yes" or "No." I do not recall. I think it was written after our answer.
Mr. Kennedy. You say that you were unaware of the fact, then, that the payment was for that purpose?
Mr. Drake. Yes, I am unaware of the fact that the payment was for that purpose.
Mr. Kennedy. Wliy did you retain or have on the payroll some- body such as Abraham Teitelbaum in the first place ?
Mr. Drake. Mr. Abraham Teitelbaum came to the association at least 10 years prior to my entry in the association. The board of directors maintained him there. I went along with the board of directors.
Mr. Kennedy. Why did you have somebody like Louis Romano
on your payroll ?
Mr. Drake. We did not have Mr. Romano on our payroll.
Mr. KJENNEDY. Mr. Romano was associated and doing work for the Chicago Restaurant Association. He was being paid out of the retainer fee that was being paid to Mr. Teitelbaum.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12889
Mr. Drake. That is correct.
Mr, Kennedy. Why did you have somebody like that around ?
Mr. Drake. What do you mean have him around? Because he was retained by Mr. Teitelbaum.
Mr. Kennedy, Well, you knew of
Mr. Lancaster. Mr. Chairman, throughout this hearing, Mr. Ken- nedy has referred to Mr. Romano as an employee of the association, and has continued with that line of questioning. That is what the witness is saying. He was not an employee of the restaurant associa- tion,
I don't think it is fair for Mr, Kennedy to continually say "Why did you have this man as an employee of the restaurant association?"
The Chairman. Just a moment, now, it is drawing a pretty fine line, but if you employ a law firm to represent you, it is generally known that many law firms have attorneys on their staff that assist them. They may be salaried, and paying the firm covers the expense of such help as they may employ. The point is here, and I think this is the crux of it: Did the restaurant association know that Romano, as an employee of Teitelbaum, was actually helping to do the work for the association? And did they know of his character and his rep- utation ?
Mr, Drake. I can tell you this, that I did not know of his back- ground or his character or reputation at that time. The only thing I did know about Mr. Louis Romano is that he had been a member of the Bartenders' Union and had been the president of same. That is all.
The Chairman, You knew nothing else about him ?
Mr, Drake, No, sir.
The Chairman, When you learned about his character and his past, his record did you insist on his being discharged or not used for the restaurant association business ?
Mr, Drake. Mr. McClellan, the first time I learned anything about his criminal record was during these hearings.
The Chairman, Of course, I can appreciate you might employ somebody without knowing. Here you didn't directly employ him, but you did know that he was assisting
Mr, Drake, I don't remember Mr, Romano being that active, Mr. McClellan,
The Chairman. I beg your pardon ?
Mr. Drake. I do not recall Mr. Romano as being that active. All our dealings were directly with Mr. Teitelbaum.
The Chairman. Do you know of any work that he did for the as- sociation ?
Mr. Drake. He didn't do the work for the association.
The Chairman. I beg your pardon ?
Mr. Drake. Any work he did, he did for Mr. Teitelbaum, and I don't recall where we actively brought Mr. Romano as an employee of the association, nor did we follow his work, in what he was doing, and I don't think any of the board of directors know much about his activities.
The Chairman. O. K., if that is the way you want to leave the record. You have a situation here that raises eyebrows. You know that as well as I do. You have this tie-up here. You get a lawyer,
21243— 58— pt. 34 3
IMPROPER A<
' i;» f 1 ^^ ^i f ., » I i If i i a » » J J i i 1 IT
' ri.:f .» 1 * !i III
IN THE LAIiOR FIELD
Mr. Dhake. At thiit tijnove did take tlio one stop that has been tostilied to l»ero, lus fur a ' ■ ■• j M' r.itelbauin to pay the money back. 1 do recall that li. i by the board, and he more
or less proiiiis<'d luui saiil tit lie would not ejUcr into tliat type of arrangement a;:uin.
Mr. Kkxnkdv. What alo. tlir ment 8Up|>osodly to be
paid to the county invent !:■ ■"•. M: ........ it f
Mr. Dkakk. (mdd I !< letter, nleiu^s Mr. Kennedy, again!
The Chair preijents to tii >vuj»css exhibit No. *J9 for hijj examina- tion.
(The d(K'ument hai
(The witne.ss confn .
Mr. Drake. I believe opinion that that had \h\
ALr. Kkn.ski>y. ly^'t's i: ''We understand tlir from the Ke^^ent I )rii_
Mr. Dkakk. I don't r< recall as to that part of t it was .something that M talked about to Mr. Kiesai.
I could recall the !^^^tl) payment. sidered hv us a |X)litii-al on*
contributions in the city ( C: ^- :
campaigns.
Mr. Kennedy. Mr. Kir-: - • * •- *- to you and to the other was to get rid of a i > , ujid .
Mr. DiLVKK. I do I I that st
Mr. Kknnedy. Mr. Kieiu just testifie<i tothaL
Mr. Dilvke. He wrote (it letter, Mr. Kenne<ly.
Mr. Kenni:i>y. He tesfied under oath that he told you all the facts in this matter.
Mr. Drake. I did not ear him. He may have I do not recall that part oit, sir.
Mr. Kenn?:dy. ^ ou neir saw this letter before?
Mr. Drake. I wouldirsay **Yefe*' or "Xo." I do not recall. I think it was written afteour answer.
Mr. Kennedy. You sp that you were unaware of the fact, then, that the payment wa- * ' :.«>se?
Mr. DRAKt:. Yes, 1 . of the fact that the payment was
for that purpose.
Mr. Kennedy. Wliv (d vou retain or have on the payroll some- boclv such as Abraliani Iltelbaum in the first place ?
Mr. Drake. Mr. Ahriam Teitellwi * ,--.. ■inon at
. ^^^^ 1;.. :....:.l of
irectors maintained hj^^^^^^f «b the board of
^^^^^^^^^^
Louis R*^
on your payroll ?
Mr. Drake, ^l
Mr. IVENNEDl
in that hrst paragraph, it wis our ' ontribution. it you umlerstand it. It says, remove the pickets
" ■ i 1 • .
pan of It, Mr. Kennedy. I don't m beftire tlie conimitteie or whether 1 had or that Mr. Teitelbaum had
I do recall that it was con-
^' V of us make jK)litical , c ofiid&b, and lor their
! that he ^v^ the full facts -wrd of directors, and this ;i|e wen* aware of that. No, it was not.
I told you that
Chicago retainer
Re
fee
uo NOT tiemov€
Internet Archive Boston Scanning Center
Shipment ID BPL: Gov Docs
IMPROPER ACTmTIES IX !IE LABOR FIELD
12SS9
Itt
Mr. Drake. That is correct,
Mr. Kennedy. Wliy did you liave S( u'lxxly like tlinl around (
Mr. Drake. Wliat do you mean hn' liiin around^ Hccaiist' lio was retained by Mr. Teitelbaum.
Mr. Kennedy. Well, you knew of
Mr. Lanca.ster. Mr. Chairman, throiliout this hearing, Mr. Ken- nedy has referred to Mr. Komano as a nnployee of the association, and lias continued with that line of q>tionin<;. That is what the witness is sayinjr. lie was not an empKee of the restaurant as.socia- tion.
I don't think it is fair for Mr. Kenidy to continually say "Why did you have this man as an employee f the restaurant asso<^u»tion?"
The Chairman, .lust a moment, now, is drawin«: a prettv line line, but if you employ a law firm to repivsit you, it is ijfenerally known that many law firms have attorneys o ilit-ir stall" that assist them. They mav be .salaried, and payinji: the fiu covers the expense of such help as they may employ. The point i here, and I think this is the crux of it: Did the restaurant associ ion know that Konumo, as an emplovee of Teitelbaum, was actual' helj)in<^ to do the work for the association? And did tiiey know 1" Ids character and his rep- utation '.
Afr. Drake. I can (ell you thi.s, that dul not know of his back- ground or his character or reputation i that time. The only thing I did know alxnit Mr. I^)uis Komano ithat he had been a member of the liartendei-s' I'nion and had been le president of Siune. That is all.
The CiiAiR>f AN. You knew nothing eh about him \
Mr. Drake. No, sir.
The Chairman. When you learned bout his character and bifc past, his record did you insist on his beiu: discharged or not a*^ for the restaurant assfniation business?
Mr. Drake. Mr. McCKdlan, the first tne I learne<l anything akna: his criminal record was during these heangs.
The Chairman. Of coui"se, 1 can aprwiate you might somebody without knowing. Here youlidn't directly emf>)m- but you ilid know that he was assisting —
Mr. Dr,\ke. I don't remember Mr. Kj.iano \vn\\a tlutf McClellan.
The Chairman. I beg \o\w pardon ?
Mr. Drake. I do not recall Mr. Ivotna » as \mxig tha our dealings were directly with Mr. Teiteianm.
The Chairman'. Do you know of any ork th»i sociation ?
Mr. Drake. He didn't do the wor! iMsodttw.
The Chairman. I begyouy^d^^^
Mr. Drake. Any work MjBB^H^^ .r W don't recall where we ,*^ of the association, ^\ and I don't thinl #' activities.
The
i^'
Jir.
,1 the lere the ff'oing into le union,
(lence, given 16 whole truth
12890 IMPROPER ACTIVITIES IN THE LABOR FIELD
and I am talking about the association and not you personally, you hire a lawyer that is known to have underworld connections, repre- senting possibly the top-ranking hoodlums in the area, and then he employs to help him another man that has a terrible record. I just can't believe that businessmen could be unaware of the situation, and that they were innocent victims or innocent in the arrangements they made here to have their business looked after by characters of tliis sort.
Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Drake, did you play any role in the hiring of Mr. Champagne?
Mr. Drake. Yes ; I did, sir.
Mr. Kennedy. What role did you play in that ?
Mr. Drake. I first went out, along with Mr. Cliff Marquis, and with Mr. Marion Isbell, to see Mr. Champagne.
Mr. Kennedy. Who recommended Mr. Champagne to you ?
Mr. Drake. I do not remember.
I believe Mr. Champagne called me. I am not sure of that. I think I got a call from Mr. Champagne. It is either that or his name was given to me by someone in my restaurant. I cannot tell you for sure.
Mr. Kennedy. You were the one that recommended Mr. Cham- pagne to the restaurant association ?
Mr. Drake. I am the one that made the original contact, that is correct, sir.
Mr. Kennedy. And you knew at that time about all of his criminal associates ?
Mr. Drake. I did not know about his criminal association; no, I did not, sir.
Mr. Kennedy. Did you investigate or look into them at all, Mr» Drake?
Mr. Drake. I think that takes just a little bit more than a direct answer. Will you give me a minute or two ?
Mr. Kennedy. Yes. But did you look into his background and experiences ?
Mr. Drake. I have to answer that if you will allow me just a min- ute. Will you allow me to do that ?
The Chairman. All right, but get to the answer.
Mr. Drake. All right. I will give you an answer, and you may be interested in hearing this answer, sir. I think you will be.
The Chairman. All right. Proceed.
Mr. Drake. At the time that we hired Mr. Champagne, I was presi- dent of the association. The Marquis had a strike around its 11 little small units, this picket line had been placed by the unions that you have so blackened here in these hearings.
The Chairman. You say we have blackened ?
Mr. Drake. Well, it has come out in testimony. We will put it that way. I will retract that, sir.
The Chairman. I don't think this committee is interested in black- ening. We are trying to develop facts. All right.
Mr. Drake. At the time they placed the picket line around this chain of restaurants in order that the owners would coerce the em-
IMPROPER ACTIVITIES IN THE LABOR FIELD 12891
ployees, force them, into joining the union. A virtual stranglehold had been placed upon this company. They could not get delivfries n the normal method. We could not get the garbage out by the normal scavengers. We had no laws to turn to There nrp n7lnw=^r.Ti. statutes of the State of Illinois or in the code of the city of Ch Wo' t^'oTsS"''- Thestrikewascostingusapproxim\4|^^S:o1S This was coming out of the voluntary fund of the Chicago Res- tauran Association, and this fund could not go on indefinite^ So when the time came that Mr. Champagne's name came to mp nnri T took Mr. Isabell and I took Mr. Marq^uif out with me to see Mr 'cTa J pagne and I asked Mr. Champagne if he could assist us in this matter he old me at that time that he would try. I said if he could success- fully terminate this strike, I could almost assure him that he could become the counsel for the Chicago Restaurant Association
1 repeat we had no place to turn. We had no local law that could give us a free election by the employees. We had nothing that could stop the secondary boycott, and according to your own statements, we were guilty of three alternatives. No. 1, if we fought we were guiltv of union busting and No. 2, if we made side deals we were extortiii money, and No. 3, this is my own opinon, if we forced those employed to go into the union that is a form of dictatorship.
That is all.
The Chairman. You haven't answered the question. Did you look into the background of Mr. Champagne before you employed him?
Mr. Drake. 1 think my answer was clearly stated we did not.
1 he Chairman. You did not ?
Mr. Drake. No, sir.
The Chairman. That is the answer. Proceed.
Mr. Kennedy Did you find out how he was spending the monev ?
Mr. Drake. No, sir. & j
Mr. Kennedy. Did you ever make any determination or any investi- him ?^ °"^ ^ ^^^ ^^^ ^^^^^ ^^^^ ^^^® money you were paying
Mr. Drake. No, sir.
• Jj^^' Kennedy. All you were interested in was that he got the results ; IS that right ? & . >
Mr. Drake. Was there anyhere else we could go «
Mr. Kennedy. Mr. Drake, why don't you answer the question?
ri ht 2^ ^^^^ interested in was that he should get the results; is that
1 "^fi: P^^^- I think I made that clear, because there was no place else that we could go.
Mr. Kennedy. The answer is "Yes" « Mr. Drake. That is right.
Mr Kennedy. I think that your position is no better than the union's.
Mr. Drake. That is your opinion.
The Chairman. Are there any further questions ?
Mr. Kennedy. That is all.
Mr. Drake. There is one thing else I would like to say, if I may say so.
12892 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. I am sorry, Mr. Drake, I had another matter here to discuss.
Mr. Drake. I did want to state that in the sessions in 1955 and 1957 in the Illinois State Legislature, two bills were proposed that were commonly called the antiracketeer picketing bills. We sent delega- tions down, and attempted to have these bills passed and the legislature saw fit to discard them both times.
There is one other point I believe should go in the record. Our voluntary contribution fund has been called a union-busting fund. I wish to make one statement on that. In 1951 I was an operator of six nonunion restaurants and ready to open a seventh. Two days prior to opening that restaurant, we had our complete crew organized, and the unions came in to see me, and, by the way, the name of the place was known as the Opera Club, and the unions came in to see me and said, "We have the majority of your employees signed up," and I said, "Produce the cards." They produced the cards, and upon checking the record they were right, and I signed a union contract for that operation.
Here I was the president of the association and had the purse strings of this fund on my side, and yet this is to prove that that voluntary fund would not back up anyone that did not have the majority of his employees that wanted to stay out of the union.
Mr. Kennedy. In view of that, how do you explain the Nantucket
case ?
Mr. Drake. I again don't believe that the union had the ma- jority of the people.
Mr. Kennedy. They said that they had cards.
Mr. Drake. Did they verify it ?
Mr. Kennedy. They said they would be glad to have you verify the
' Mr. Drake. Mr. Gutgsell said that, and at no time did they tell that to Mr. Reade, and I was very close to Mr. Reade throughout the entire strike. .
Mr. Kennedy. Mr. Gutgsell was your representative and he made a sworn statement here, before the committee, to that effect.
Mr. Drake. Did he verify the cards?
Mr. Kennedy. He said that he went and they showed him 19 cards, and the union would be glad to have the cards examined and the signatures compared, and nobody from the association and no- body from the Nantucket Restaurant were interested in having the signatures compared. For that reason your position is far dif- ferent than it would be otherwise.
You weren't interested at that time in having the signatures compared?
Mr. Drake. I can't recall his sworn testimony word for word, Mr. Kennedy. I was here at the time, and I think that there are a few facts that are wrong.
Mr. Kennedy. Oh, no ; I know that they are not.
Mr. Drake. That is exactly what he said.
The Chairman. We have the record both ways, now. Is there anything further ? .
Senator Gold water. I have just a few questions, Mr. Chairman, before this witness leaves. I think this points up a fact that goes
IMPROPER ACTIVITIES IN THE LABOR FIELD 12893
across the country, that small-business people, whether they be res- taurant people or merchants or whatever they be, are not able to combat (1) the lack of interest of the State legislatures in these matters when they refuse to pass legislation to cover these things, and (2) the lack of interest of local governments when they refuse or don't show enough interest to pass ordinances or legislation to cover these no man's land cases, and (3) if we didn't have these organizations, and I don't condone all of the activities of all of these organizations, many small-business men would go out of business.
Mr. Drake. That is true.
Senator Goldwater. I think this points up very vividly the need for State legislatures across this country to pay some attention to local labor laws, and also for police departments and city governments across the country to give some protection to both sides of the fence. I know today in practically every city of any size in this country what we have heard described in Chicago could exist and does exist in many cases. These associations are a virtual necessity for the ex- istence of small business regardless of what they are.
Now, they might be run one way in one town and another way in another town, but they live across this country and they serve a purpose. They will continue to live until our legislative bodies at the local level assume their responsibilities. I think the States should have laws to cover these areas. I don't like to see the Fed- eral Government invade this no man's land with its power. I don't like to see Federal Government extend its Taft-Hartley law down into intrastate commerce. But if the local authorities don't do it, that is the only source of enforcement that they are going to have.
Mr. Drake. I think your analysis is excellent.
The Chairman. The committee will stand in recess for 5 to 10 minutes. We want to proceed a little longer today into the noon hour than usual, because we cannot reconvene this afternoon until 3 o'clock. So we would like to run along as far as we can.
You may stand aside for the present and we will stand in recess for 5 or 10 minutes.
(A brief recess was taken.)
The Chairman. The committee will come to order.
Mr. Kennedy. We planned to put in the figures that we have on the Chicago Restaurant Association but the witness is out of the room at the present time, and so I would like to call someone else.
(At this time, members of the committee present are: Senators McClellan and Goldwater.)
The Chairman. The Chair observes that a quorum is present.
Mr. Kennedy. We move into a new phase of the hearings, Mr. Chairman, and we have been discussing the relationship between the various unions and the Chicago Restaurant Association, where the Chicago Restaurant Association made a role. Now we are going into situations where the individual restaurants had to deal with the union, and I would like to call as the first witness Mr. Jay Adler.
The Chairman. You do solemnly swear that the evidence, given before this Senate select committee shall be the truth, the whole truth and nothing but the truth, so help you God?
Mr. Adler. I do.
J2894 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF JAY ABLER
The Chairman. State your name, and your place of residence, and your business or occupation.
Mr. Adler. Jay Adler, 9050 South Coyne, Chicago, restaurant business.
The Chairman. How long have you been in the restaurant business?
Mr. Adler. Twenty-five years.
The Chairman. Do you waive counsel, Mr. Adler ?
Mr. Adler. Yes, sir.
The Chairman. All right, Mr. Kennedy.
Mr. Kennedy. Mr. Adler, were you approached in 1935 about hav- ing certain of your employees made members of the union ?
Mr. Adler. I was approached in 1935 for having all of the em- ployees in the union.
Mr. Kennedy. What restaurant did you own at that time?
Mr. Adler. Well, I was a partner of Mr. Mickelberry, in Mickel- berry's Log Cabin Restaurant.
Mr. Kennedy. Is that the restaurant you have at the present time?
Mr. Adler. Yes, sir.
Mr. Kennedy. Do you own that ?
Mr. Adler. With Mrs. Mickelberry.
Mr. Kennedy. And that is M-i-c-k-e-1-b-e-r-r-y Log Cabin Restau- rant?
Mr. Adler. Yes, sir.
Mr. Kennedy. Did you give the address ?
Mr. Adler. 2300 West 95th Street, Chicago, 111.
Mr. Kennedy. Did Mr. Blakely of local 593 have discussions with you at that time ?
Mr. Adler. Well, there was quite a few, Mr. Kennedy, and I am of the opinion that Mr. Blakely was in the group, but I don't remember exactly.
Mr. Kennedy. AVliat was the proposition that was made to you?
Mr. Adler. They came in to see us and wanted us to join the union.
Mr. Kennedy. Would you tell us what you did then ?
Mr. Adler. AVell, we talked to them and nothing was done, and the matter was left undecided and they said they would be back again which they did, in I would say 4 or 5 times in 1935, and then in 1936.
Mr. Kennedy. Did you put a certain number of your employees in the union ?
Mr. Adler. Well, Mr. Kennedy, may I tell you somethmg about it before I say that? The arrangement they wanted was for the whole place to be unionized but Mr. Mickelberry wouldn't put the girls in.
After every one of these meetings, it still was the same, Mr. Mick- elbeiTy would not put the girls in. Then in 1936 there was a nian by the name of Corky in the restaurant evenings late at night with his wife, and he would sit around and talk, and both Mr. Mickelberry and I got to know him although we never knew what business he did or where he lived.
So one night he said to me, "Jay, Mr. Adler, what reason do you and Charley have for not going in the union?" and I said to him, "What miion," and he said, "The Hotel and Restaurant Union," and I said, "Do you represent them," and he said, "Y^es." I said, "Y^ou know
IMPROPER ACTIVITIES IN THE LABOR FIELD 12895
why we won't go in, we won't put the girls in," and Mr. Cortney said "Maybe that can be arranged." And so I told Mr. Mickelberry the next day, and about I don't how much longer after that, but anyway they came back, the whole bunch of them came out, and we had a meet- ing, and we put the kitchen employees in and left the girls out.
Mr. E^ENNEDY. How many employees did you put in ?
Mr. Adler. About 10 or 12.
Mr. Kennedy. And subsequently
Mr. Adler. It was our total kitchen force.
Mr. Kennedy. Subsequently that has been raised to about 19; is that right?
Mr. Adler. Yes, sir.
Mr. Kennedy. Were those employees ever informed that they were in the union ?
Mr. Adler. At the start it is pretty hard for me to remember for sure, 25 years ago, but I don't think they were told, but subsequently within a month, sometime during the month, they all knew they were in, because they all got letters of greetings from Cincinnati, informing them that they were welcome to the union.
Mr. Kennedy. Did the union ever make any approach to them ?
Mr. Adler. Not that I know of.
Mr. Kennedy. Was there any wages or hours or conditions dis- cussed ?
Mr. Adler. Not that I know of.
Mr. I^NNEDY. You continued to pay the dues on these 19 em- ployees ?
Mr. Adler. Yes, sir; Mr. Kennedy. We were going to take the dues out of the employees' wages after we got in there, but being in 1936 right at the time of the depression, we just didn't do it and we have always been going to do it but we never have.
Mr. Kennedy. So you still pay on them, do you not ?
Mr. Adler. Yes, sir.
Mr. Kennedy. Some of the employees that you were paying on were not even employed at your restaurant, is that right ?
Mr. Adler. Well, they were changed from time to time, Mr. Ken- nedy, and that fact was brought out when Mr. Duffy and Mr. Kelly came to see me.
Mr. Kennedy. Mr. Duffy, can you tell us what the record shows as to that ?
Mr. Duffy. We examined the records of Mr. Mickelberry^s Kestau- rant and we found he was paying dues on 19 employees without de- ducting those dues from the employees' salaries. Checking those 19 names, we found that he was paying on 4 employees that had been gone some as far back as 1956.
Mr. Adler. That is right, 2 years.
Mr. KJENNEDY. Two of the employees have been gone since 1954, according to the records.
Mr. Adler. I suppose that is right.
Mr. Kennedy. Did the union representatives of local 593, Mr. Blakely or Mr. Lardino ever check to determine whether you were paying union scale ?
Mr. Adler. Well, I have never met Mr. Lardino, Mr. Kennedy, but Mr. Blakely never checked.
12896 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. He never did ?
Mr. Abler. No, sir.
Mr. I^nnedy. Did you ever sign any kind of a contract with the union ?
Mr. Adler. I don't think that I did.
Mr. Kennedy. No welfare benefits for the employees? There have been no welfare benefits, other than what you might give them yourself ?
Mr. Adler. That is right.
Mr. Kennedy. How did you know what the union scale was for any of the employees ?
Mr. Adler. I didn't know it up to that time, and I have a general idea what it is now.
Mr. Kennedy. But as of the time we started our investigation ?
Mr. Adler. That is right, I know the girls get 67 cents.
Senator Goldwater. That is an 8-hour day ?
Mr. Adler. Well, the girls, Senator, are on part-time, and some work 11 to 2, and some work 5 to 9.
Senator Goldwater. Sixty-seven cents is based on an 8-hour day ?
Mr. Adler. It is 67 cents an hour.
Senator Goldwater. Based on an 8-hour day ?
Mr. Adler. I don't think there is any hourly basis on it, and 1 don't think that there is any daily basis.
Senator Goldwater. Do you have any State law in Illinois that limits the length of time a woman can work ?
Mr. Adler. That is right, 8 hours.
Senator Goldwater. Forty-eight hours a week, or 8 hours a day ?
Mr. Adler. An 8-hour day.
Senator Goldwater. No longer than 8 hours in 1 day ?
Mr. Adler. That is right.
Senator Goldwater. Nor 48 hours in 1 week ?
Mr. Adler. That is right.
Mr. Kennedy. They never spoke to you about finding out whether any of your employees were being paid the union scale, that is the union representatives ?
Mr. Adler. No, they didn't, but I talked to Mr. McCormack on 1 or 2 occasions, who was the man that came in to collect the dues, and I asked about certain wages like if $75 was enough for the cook, and if that was the wage scale, and he would say yes.
Mr. Kennedy. Was Mr. Blakely by there quite frequently ?
Mr. Adler. I wouldn't say quite frequently, and he comes in off and on.
Mr. Kennedy. And he never discussed it with you himself ?
Mr. Adler. No.
Mr. Kennedy. We have Mr. Gotsch, who will testify as to how many employees are being paid union and how many are not.
The Chairman. All right.
TESTIMONY OF GERALD GOTSCH— Resumed
Mr. GoTSCH. In the restaurant there are 77 employees, in the rest- aurant category classification. Sixty-six are being paid below union scale, and 11 are being paid above. The total annual savings to this restaurant is $19,600 annually.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12897
The Chairman. You mean if the regiihir union scale was paid, it would cost that much more to operate the restaurant ? Mr. GoTSCH. That is correct, Senator.
TESTIMONY OF JAY ADLEK— Resumed
The Chairman. Let me ask you a question or two, Mr. Adler. Wlien did you first put your employees into the union ?
Mr. Adler. 1936.
The Chairman. It was in 1936 ?
Mr. Adler. Yes, sir.
The Chairman. For the past 22 years, do I understand, that the management has paid the dues ?
Mr. Adler. Yes, sir.
The Chairman. There has never been any deduction of dues ?
Mr. Adler. No, sir.
The Chairman. Management has paid it ?
Mr. Adler. Yes, sir.
The Chairman. Were the employees or any of them consulted about whether they should join the union or not ?
Mr. Adler. Well, I would say about for the last 10 years, every time one of the employees is put into the union I tell them about it and they sign a ticket, and the union application.
The Chairman. But the point I am making here is that in the initial arrangement, the working people themselves had no choice. They were not given the opportunity of the free exercise of their choice as to what union they would like to belong to or prefer to belong to, or if they preferred to belong to none.
Mr. Adler. You are referring back to the 22 years ago, back to 1936?
The Chairman. For all of those years, up to the last 10 years, you say.
Mr. Adler. Yes, sir.
The Chairman. That would be correct ?
Mr. Adler. Yes, sir.
The Chairman. Now, what is the advantage to your employees of having such an arrangement. What do they get out of it ?
Mr. Adler. Well, at the time. Senator, I didn't know what they got except they did get $200 for death benefit.
The Chairman. They have to die to get anything out of it ; is that right?
Mr. Adler. But since then I have learned that they have a hos- pitalization plan.
The Chairman. Do you know what it is ?
Mr. Adler. Just if they are sick they go to the hospital, and the union pays for it.
The Chairman. We all do that, if we can, I guess. Who pays the bill and how much, do you know what the arrangements are ?
Mr. Adler. No.
The Chairman. Do you have any contract with the union at all other than just this verbal understanding?
Mr. Adler. Not that I know of.
The Chairman. Does your arrangement include that they will not undertake to organize your waitresses ?
12898 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Abler. Well, that is pretty hard for me to say.
The Chairman. That has been an implied understanding, hasn't it ? Yon wouldn't put them there ?
Mr. Adler. ]Mr. Mickelberry wouldn't put them in.
The Chairman. And they settled on that basis ?
Mr. Adler. Yes, sir.
The Chairiman. That you would put in the kitchen help at that time?
Mr. Adler. Yes, sir.
The Chairman. You put in 10 or 12 at that time, and they agreed then not to molest or undertake to organize your waitresses?
Mr. Adler. AYell, they never mentioned anything about the wait- resses after that.
The Chairman. Have they mentioned anything about trying to organize them for the past 22 years ?
Mr. Adler. No.
The Chairman. So what you have actually done is kind of bought labor peace ; haven't you ?
Mr. Adler. Well, I would say "Yes."
The Chairman. That is what it actually adds up to.
Mv. Adler. But Senator
The Chairman. I am not saying you haven't profited by it, but that is what it actually amounts to. There has been no free exercise of the right of the individual to join a union or not to join, has there?
Mr. Adler. Xo.
The Chairman. They haven't that right?
Mr. Adler, No.
The Chairman. Your agreement with the union took that privilege away from them ?
Mr. Adler. Yes, sir.
The Chairman. That is what it amounts to; isn't it?
Mr. Adler. That is right.
The Chair^ian. And by reason of this arrangement, you have had no strikes, and you have had no difficulty with the union in any way ?
Mr. Adler. Well, Senator, in the first place we never had any threats, and there was never any argument and there was never any coercion and there was never any smart aleckness or bulldozing. It was just done on a gentle basis.
The Chairman. They treated you nicer than they have some others.
Mr. Adler. Well, I guess maybe they have.
The Chairman. I think that you know that, don't you ?
Mr. Adler. Yes, sir.
The Chairman. So you just as a matter of mutual arrangement, you thought this was the best way to handle it, and we will put some of them in, as few as we can, and settle with them, and satisfy them, and then go on and operate.
Mr. Adler. Well, I wouldn't say exactly that, Mr. Senator. I wouldn't say that we put as few as we could. We put in what we had in the kitchen.
The Chairman. You put in the kitchen when they were demanding all of your employees ?
Mr. Adler. That is right.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12899
The Chairman. Now, during this period of time, have they ever been concerned or carried on any negotiations with you or done any- thing, the union I am speaking of, and its officials, toward improving the working conditions of your employees, your hours of pay, and your rate of pay or anything ?
Mr. Adler. Not that I know of.
The Chairman. So, so far as any benefits flowing to the union members, those that you put in the union, all you know of is you think they get $200 if they die, and they may get some kind of hospital benefits if they go to the hospital.
Mr. Adler. Yes. But I would like to say. Senator, if I can, our emplo3'ees are all very well satisfied. Of course, you hear this from everybody. I suppose it is an old story. But my average kitchen help, the average throughout the years of service, is 11 years. There are 3 at 22 years, 1 at 25 years, 1 at 24 years, and the total of the waitresses is 8 years. I am sure that even though Mr. Duffy brings those figures out, when I get back home everybody is going to think I am a Shylock and all that kind of stuff.
The Chairman. No ; the real purpose of this is, in the first instance, to show that the union, professing to be concerned about the welfare of the workers that it represents, certainly is not very vigilant or diligent in looking after their interests when they simply get the money out of management and then go off and pay no more attention to them. When one joins a union, I don't mean they ought to start trouble every time and call a strike and make unreasonable or improper demands. I do think when you join a union, you join for the purpose of the collec- tive benefit that comes to the members by reason of being in an organi- zation that looks after their interests. I think this thing is another demonstration. You say you get along with them very well and you finally worked it out amicably, but it clearly demonstrates that a lot of these union organizers and union heads are in it for nothing except to get the money, primarily. They are making a racket out of it. I am not being critical. I can appreciate I am critical to this extent: I don't think any management has a right to put the members, the people who work for them, into a union without their knowledeg and consent. I think it is wrong. I think it is a practice that prevails in some areas, and I think it should be strongly condemned. I think the practice of unions going out and coercing and intimidating people, trying to put them out of business, calling strikes to make management sign up the employees, is also reprehensible. It is those practices we are looking into, trying to find ways to remedy this and to bring the thing back into its proper perspective, where the'individual worker has a right, where he has some say-so about whether he belongs to a union or not, and, if so, what union it is he wants to represent him.
We have cases where it has been thoroughly demonstrated before this committee, where people get into unions, some against their will or without their knowledge and consent. The union officials get corrupt. They are indifferent about the welfare of the worker. They find they can do nothing about it. They still have to go on paying dues if they work. It is those conditions that need remedy.
Mr. Adler. In my particular case, not that I want to be an exception, but at the end of what you had to say at least I didn't take the money away from the people. I paid it myself.
The Chairman. No ; you didn't.
12900 IMPROPER ACTIVITIES IN THE LABOR FIELD
But the practice, in my judgment, is an improper practice. They still ought to have a little liberty and freedom among the individuals in this country. When management and labor leaders conspire or enter into a collusive arrangement where it amounts simply to a payoff without very much concern for the welfare of the workers — and I am not saying you are not good to them, but there are many instances where this operates this way — it keeps the employees depressed and under a state of oppression. They are not free. They have a repre- sentative of the union supposed to be looking after them, and the union interest is to get a few dollars from the owners, the easiest way, and let the workers go on. All they want is the dues.
]\Ir. Adler. Senator, may I ask Mr. Gotsch a question ?
The Chairman. Yes; any information you want.
Mr. Abler. In that total amount of moneys, have you got the wait- resses figured in there ?
Mr. GoTSCii. Yes, of course.
Mr. Adler. They shouldn't be, should they ?
Mr. GoTscH. Your waitresses were being paid 60 cents an hour, 7 cents below union scale.
Mr. Adler. But they never Avere in the union and they never agreed to be in the union.
Mr. GoTscH. If they were paid union scale.
Mr. Adler. I beg your pardon ?
Mr. Gotsch. If they were paid union scale.
The CiiAiRMAx. This is if they were paid union scale. It is the difference between what you pay and what you would pay if a union looking after the interests and welfare of its members, if they were in the union, you would have to pay them, I assume, the established scale.
Senator Goldwater.
Senator Goldwater. Mr. Adler, have your employees ever asked for representation ?
]\Ir. Adler. No, sir.
Senator Goldwater. At any time, since this started in 1936 ?
Mr. Adler. No, sir.
Senator Goldwater. Have they ever since come to you and asked that they be represented by a union ?
Mr. Adler. No, sir.
Senator Goldw^ater. You explained or told us about your low turnover, which I think is a rather good rate of turnover compared to the average restaurant. Do you account for this by virtue of any bonuses that you might pay ? Do you pay, for example, a Christmas bonus ?
Mr. Adler. Yes, sir.
Senator Goldwater. Do you have any idea how much that might amount to ?
Mr. Adler. Yes, sir.
Senator Goldwater. How much ?
Mr. Adler. It amounted to $2,700 last year.
Senator Goldwater. Among 70 employees ?
Mr. Adler. That is right, sir. And we give them in cash.
Senator Goldwater. Do you pay other bonuses ?
Mr. Adler. No, sir.
Senator Goldwater. Do you have any retirement plan ?
Mr. Adler. No, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12901
Senator Goldwater. Do you have any fund from which they can borrow when they need money ?
Mr. Adler. Well, I haven't got from which they borrow, but they certainly get it.
Senator Goldwater. Do you mean if they come to you
Mr. Adler. I am buying automobiles, radios, televisions, divorces, funerals, and all sorts of things.
My employees are into me about $700 or $800 all the time.
Senator Goldwater. As a total ?
Mr. Adler. The last one is an automobile I am buying for a boy. His payments are $83 a month and he can't pay $83 so I take out $15 a week except for the first week, which amounts to $45 a week, and I charge his account the balance. Then after the automobile gets paid and he gets the automobile, then he will go on until I get my money back. Some of them I take $2 a week out. Some of them I put every school year, a lot of the women in the kitchen, the colored women in the kitchen, borrow $100 or $150 to get clothes and shoes for their children and I take it, $1 a week or $2 a week, whatever it takes. But they are always into me. And I am glad to do it. Don't anybody get the idea that I am not. I am glad to do it, because of no other reason than I think these type of people need help, and they are at the mercy of some of the darndest arrangements that you ever saw.
For instance, 2 years ago one of my employees came and she had a garnishment for $176. So I said to her "Amie, what is it?" She said "Well, Mr. Adler," she says, "I went down to this jeweler's place and they had a diamond Cavalier watch, and he said I just ought to have that, and I thought I would, but I had not paid up my other pay- ment yet, so I told tliem I didn't want to. Then he says 'Well, I tell you what you do. We are having a sales contest at Christmas time and we get a prize, the salesmen get a prize. You just sign this slip and then when Christmas is over the sales contest is over and you can bring it back and you will get credit for it and I have a prize.' "
Well, that goes on all tlie time with the colored people. They are always being taken. Some fellow slips up and sells one of them a diamond ring for $150. He doesn't have to pay for it, but he gets a little ticket that he signs, and he is stuck and I am stuck. And if they should quit, I am stuck, I don't get the money back.
I have one fellow, he has been with me 25 years, but last year or 2 years ago he owed me $950 on a radio he bought 7 or 8 years ago and it is busted and gone and broken down, but they caught up with him and he still had to pay them. It is an injustice, I think. But I am digressing from the restaurant business.
Senator Goldwater. That is all I had, Mr. Chairman.
The Chairman. I am sure there are many other operations of rackets and abuses that possibly do not come within the jurisdiction of this committee, and I think it is tragic when poor people like that are imposed on. Yet I don't know how you can pass a law that would prevent them from being suckers if they just want to be or will be. So Ave can't do very much about that.
All right. Thank you very much.
Call the next witness.
Mr. Adler. Thank you, sir.
Mr. Kennedy. Mr. George Hessberger.
12902 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. You do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. Hessberger. I do.
TESTIMONY OF GEORGE HESSBERGER
The Chairman. State your name, your place of residence and your business or occupation.
Mr. Hessberger. George Hessberger, 4300 North Lincoln, Chicago, 111., restaurateur.
The Chairman. You waive counsel, do you ?
Mr. Hessberger. Yes, sir.
The Chairman. Proceed.
Mr. Kennedy. You family owns a restaurant in Chicago ?
Mr. Hessberger. Yes.
Mr. Kennedy. "Wliat is the name of that ?
Mr. Hessberger. George Hessberger's Restaurant.
Mr. Kennedy. Is there a Heidelberger Fass?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. Is that another name for it ?
Mr. Hessberger. Yes, sir, we are gradually dropping that.
Mr. Kennedy. You are dropping the name Heidelberger Fass and it is going to be known as George Hessberger's Restaurant ?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. And the address is 4300 North Lincoln Avenue, Chicago.
Mr. Hessberger. Yes, sir.
Mr. Kennedy. How long have you been in the restaurant business ?
Mr. Hessberger. My father has been there 40 years and I have been there 10 years.
Mr. Kennedy. 10 years?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. You were in the service, were you ?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. Wliat branch?
Mr. Hessberger. Parachute Infantry, 82d Airborne.
Mr. Kennedy. You were wounded, were you ?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. After you got out of the service, you came back and within a short time went into the restaurant business to help your father and mother?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. Mr. Hessberger, were you approached in 1955 about having certain of your employees made members of the union ?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. When was that? About December of 1955?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. I understand you are not feeling too well now, is that correct?
Mr. Hessberger. I feel fine now, thank you.
Mr. Kennedy. Certain union representatives of local 593 came, is that right?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12903
Mr. Hessberger. Yes, sir.
Mr. Kennedy. Do you know who they were ?
Mr. Hessberger. One of these gentlemen's name is Mr. Tempkins, I believe.
Mr. Kennedy. T-e-m-p-k-i-n-s?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. And he was a business agent?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. For local 593, was it?
Mr. Hessberger. Yes, sir. There was one other gentleman with him. I don't know his name.
Mr. Kennedy. What did they want from you at that time ?
Mr. Hessberger. They approached my father and I that they had orders from someplace downtown, I believe was the term they used, to get two members from our restaurant into their union, and at that time we had asked them what part of the employees, and they said dishwashers, I am pretty sure. And they asked what we paid them and other benefits we may have. I told them.
Mr. Kennedy. Would you speak up a little louder, please?
Mr. Hessberger. Yes, sir, I told them the pay we paid to the em- ployees and also the other benefits which we may have had at that time. They said in view of that it would not do any good to talk to the employees, to attempt to get them to sign up in the union, and, therefore, they just wanted to have two members that we should more or less take out of a hat, and that they should belong to the union. At that time, I asked them what would happen if we did not put two persons into the union, and they said they woidd picket our place of business.
At that time I didn't think that was correct. We gave them the right to unionize the restaurant if they wanted to, and they should not picket our restaurant just because we don't want to put people in that are not being represented by the union. He still insisted we ought to have two members and in order to avoid a picket line around the restaurant we decided to join the union.
Mr. Kennedy. Did you tell them at that time what you thought this was?
Mr. Hessberger. Yes, sir ; I believe I told them I thought it was blackmail, or words like that. There was no coercion on their part. It was a nice friendly conversation, but they insisted that there be two employees. We finally ended up with my mother joining and I joined. Mr. Kennedy. How many employees did you have ? Mr. Hessberger. At that time I believe we had 22 employees. Mr. Kennedy. So you put in two of the owners, is that right, your mother and yourself.
Mr. Hessberger. Yes, sir.
Mr. Kennedy. And you felt that if you did not make this payment, make this arrangement, you would have a picket line there; is that right?
Mr. Hessberger. Yes, sir. We did not have a picket line after. Mr, Kennedy, Did you consider it blackmail and extortion ^^ Mr. Hessberger. I think after we thought it all over it didn't seem quite that, although I always resented it.
12904 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. How would you describe it at the present time, then, if it was not blackmail and if it was not extortion ?
Mr. Hessberger. Well, after a number of months, it became a regu- lar business expense, and we never paid until the man came to the restaurant to pick it up.
Mr. Kennedy. You were told that you had to pay this money or else, were you not?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. Doesn't that amoimt to extortion ?
Mr. Hessberger. Yes, sir.
Mr. Kennedy. Isn't that what this was, in fact, extortion from you?
Mr. Hessberger. At that time; yes, sir.
Mr. Kennedy. We have found, Mr. Chairman, we went in to look at the books and records and the salaries being paid to these employees.
As you point out, they are above union scale. There was not any benefit that could possibly be accrued to the employees by this arrange- ment, was there ?
Mr. Hessberger. The employees were never given an opportunity to state one way or another, sir.
Mr. Kennedy. And you and your mother did not get any benefit out of it ; did you ?
Mr. Hessberger. No, sir.
The Chairman. You did get this out of it, you avoided a picket line.
Mr. Hessberger. Yes, sir.
The Chairman. In other words, they used that as a club over you. "You either contribute to us" and that is what it amounted to "or we are going to put up a picket line here and hurt your business."
Mr. Hessberger. Yes, sir.
The Chairman. You regarded it at the time as blackmail or extortion.
]\Ir. Hessberger. Yes, sir.
The Chairman. As a result of this, have they ever undertaken to organize your help since then ?
Mr. Hessberger. No, sir.
The Chairman. So you just bought labor peace with this small contribution ? That is what it amounts to ?
Mr. Hessberger. Yes, sir.
The Chairman. And notwithstanding the fact that you were treat- ing your employees all right, they were happy, they were satisfied, you were paying them as much or more than the union could get for them, you still had to join? That is, management actually joined, the management of the business actually joined the union ?
Mr. Hessberger. Yes, sir.
The Chairman. Is there anything further ?
Mr. Kennedy. Do you have anything to say ?
Mr. Hessberger. No ; except since the time that I have been served with a summons, we have dropped the union. We are no longer paying, and we have not had any trouble to date.
The Chairman. You have had no trouble to date?
Mr, Hessberger. No, sir.
Mr. Kennedy. Mr. Hessberger has been very cooperative with the committee, as has his restaurant, Mr. Chairman.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12905
The Chairman. Counsel lias advised that you have been very co- operative and we appreciate it. We are trying to explore these things and find out what has been going on that should not be going on in these relationships, both in labor and in management.
It is very helpful to us when management or labor or anyone else cooperates with us. We are thankful to you for it.
Call the next witness.
Mr. Kennedy. Mr. Ellis Segal.
The Chairman, Do you solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth and nothing but the truth, so help you God ?
Mr. Segal. I do.
TESTIMONY OF ELLIS SEGAL
The Chairman. State your name, your place of residence, and your business or occupation.
Mr. Segal. My name is Ellis Segal. I reside at 8110 Louella, Chicago, 111. I am a restaurant owner.
The Chairman. Do you waive counsel, Mr. Segal?
Mr. Segal. Yes, sir, I do.
The Chairman. All right, Mr. Kennedy.
Mr. Kennedy. You operate Segal's Kestaurant; is that right?
Mr, Segal. Yes, sir.
Mr. Kennedy. That is located at 8276 South Chicago Avenue, Chi- cago, 111.
Mr, Segal. Yes, sir,
Mr. Kennedy. You have approximately how many employees?
Mr. Segal, I have approximately 28,
Mr, Kennedy. Were you approached sometime in 1949 by an official of local 394 to have your employees join the union ?
Mr, Segal. That'is right.
Mr, Kennedy. Is that right ?
Mr, Segal, That is right,
Mr. Kennedy. Do you know who it was that approached you at that time ?
Mr, Segal, Frank Trungell.
Mr, Kennedy. Trungell?
Mr, Segal, Trungell,
Mr. Kennedy, He is the business agent of local 394 ?
Mr, Segal, I think that is what he was at the time,
Mr. Kennedy. And he is also secretary-treasurer of that local, l ou did not know that at the time ?
Mr, Segal. I did not know.
Mr. Kennedy, What did he say at that time ?
Mr, Segal. He asked me to install some of my employees ni the
union, • ^ ^i +9
Mr. Kennedy. Had he approached your employees prior to that f Mr, Segal, Not at all. Not that I know of, at least. Mr. Kennedy. Was there anything indicated that would happen it
you did not? ^ ^ , • i x v +
Mr. Segal, AVell, I was told that there would be a picket line put
around my place of business,
21243 — 58 — pt. 34 4
12906 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Did you install the employees ?
Mr. Segal. Well, after several meetings I figured it best.
Mr. Kennedy. I can't hear you very well.
Mr. Segal. After several meetings I figured it best that I do.
Mr. Kennedy. How many employees did you give them ?
Mr. Segal. Eight.
Mr. Kennedy. You gave them the amount of money for the equiva- lent of eight employees!
Mr. Segal. Eight employees.
Mr. Kennedy. And you took eight names and gave them to the local representative ?
Mr. Segal. That is right.
Mr. Kennedy. Did you tell the employees they were being placed in the union ?
Mr. Segal. No, I did not.
Mr. Kennedy. How much money did you pay ?
Mr. Segal. I think it was $24 a month.
Mr, Kennedy. Have you ever told your employees that they are members of the union ?
Mr. Segal. No, I have not.
Mr. Kennedy. Who collects the money from you, Mr. Segal ?
Mr. Segal. Now ?
Mr. Kennedy. Yes.
Mr. Segal. James O'Connor,
Mr. Kennedy. He is president of local 394 ?
Mr. Segal, I think that is his title,
Mr. Kennedy. He collects a $96 check every 2 months?
Mr. Segal. Every 3 months.
Mr. Kennedy. Do you deduct that as expenses ?
Mr. Segal. As expenses ; yes.
Mr. Kennedy. You have no contract with the union ?
Mr. Segal. No ; I haven't.
Mr, Kennedy, No health or welfare ?
Mr, Segal. No ; I have not.
Mr. Kennedy. Have they ever discussed the wages, hours, and con- ditions of your employees ?
Mr. Segal. Never.
Mr. Kennedy. Does this benefit your employees at all, this arrange- ment ?
Mr. Segal. I wouldn't say it does.
Mr. Kennedy. Of the eight that you were paying on, how many are still in your employ ?
Mr. Segal. I don't know, I don't know what the original list was.
Mr, Kennedy, Mr, Gotsch, how many of the eight employees that he is paying dues on
Mr. GoTSCH. None of the employees are there any more.
Mr. Kennedy. Just every 3 months you pay $96.
Mr. Segal. That is right.
Mr. Ivennedy. Actually, it amounts, once again, to a payoff; does it not?
Mr. Segal. That is what you can call it.
Mr. Kennedy. That's what you would call it.
Mr. Segal. I guess so.
Mr. Kennedy. Do you know what union scale is ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12907
Mr. Segal. No, I don't.
Mr. Kennedy. It has never been discussed with you ?
Mr. Segal. Never been discussed with me.
Mr. Kennedy. He has 29 employees. How many are below union scale ?
Mr. GoTSCH. Twenty-three are paid below union scale.
Mr. Kennedy. What is the saving, approximately 'i
Mr. GoTSCH. The saving is approximately $11,000 annually.
The Chairman. Mr. Segal, what is the real purpose of making this payment?
Mr. Segal. Well, to avoid any sign of trouble that may happen or anything that may harrass business.
The Chairman. In other words, you know they could put up a picketline and give you trouble.
Mr. Segal. That is right.
The Chairman. So you are just paying it as a shakedown so that you may have labor peace ; is that it ?
Mr. Segal. Well, by this investigation, it has been shown that way.
The Chairman. Do you know of any benefit at all that the union provides for your employees ?
Mr. Segal. None at all.
The Chairman. These eight that you originally put in there are no longer with you. Why haven't you changed it to some others?
Mr. Segal. Well, it was never brought to my attention.
The Chairman. It wasn't necessary. This was just a kind of mutual arrangement so the union would get something, the union officers would get something, and you would avoid something?
Mr. Segal. I'hat is right.
The Chairman. Is there anything further ?
Senator Goldwater. Mr. Segal, have any groups of your people ever wanted to join a union ?
Mr. Segal. Never.
Senator Goldwater. Have you ever discussed this with them ?
Mr. Segal. No, I haven't. They have always been very satisfied.
Senator Goldwater. Do you know why they would not be interested in joining a union ?
Mr. Segal. I don't know of anything they would benefit by it. There has never been an agreement.
Senator Goldwater. What is the rate of turnover in your business, from the employee standpoint ?
Mr. Segal. It is a tremendous turnover.
Senator Goldwater. Say in the kitchen, what is the average length of service of your cook ?
Mr. Segal. Well, I haven't got that type of an operation. I have more of a drive-in style, and in the delicatessen line. Mine is just a shade different than the average restaurant. Mine are more so-called as a grillman or counterman, and the turnover the greater. They are known as floaters.
Senator Goldwater. That is all I have.
The Chairman. Is there anything else ?
If not, we thank you very much.
The committee will stand in recess until 2 : 30 o'clock.
(Whereupon, at 12 : 50 p. m., the committee recessed, to reconvene at 2: 30 p.m. of the same day.)
12908 IMPROPER ACTIVITIES IN THE LABOR FIELD
AFTERNOON SESSION
(At the reconvening of the session, the following members were present : Senators McCIellan and Goldwater.)
The Chairman. The hearing will come to order. Call the next witness.
Mr. Kennedy. Mr. Tony DeSantis.
The Chairman. Do you solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. DeSantis. I do.
TESTIMONY OF ANTHONY DeSANTIS
The Chairman. State your name, your place of residence, and your business or occupation.
Mr. DeSantis. My name is Anthony DeSantis. My place of busi- ness is the Martinique Restaurant, 2500 "West 94th Place, Evergreen Park, 111.
The Chairman. You waive counsel, do you, Mr. DeSantis ?
Mr. DeSantis. Yes, sir.
The Chairman. All right, Mr. Kennedy, proceed.
Mr. Kennedy. Mr. DeSantis, your restaurant employs about what, 145 people ?
Mr. DeSantis. Yes, sir; approximately.
Mr. Kennedy. It is one of the biggest restaurants in Chicago, is it ?
Mr. DeSantis. It is out of Chicago. It now is one of the biggest; yes, sir.
Mr. Kennedy, It is one of the biggest ?
Mr. DeSantis. Yes, sir.
The Chairman. Do you want to say it is one of the best, too, and get in a plug ?
Mr. DeSantis. I certainly will.
Mr. Kennedy. Do you have a theater there also ?
Mr. DeSantis. Yes, sir; I operate the Drury Lane Summer The- ater, in conjunction with my restaurant.
Mr. Kennedy. And you also have some of the biggest bands in the country in the restaurant ?
Mr. DeSantis. I play all name bands ; yes, sir.
Mr. Kennedy. I thought you would like to get that into the record.
Mr. DeSantis. Some of the bands, sir ?
Mr. Kennedy. No ; just the fact that you have them.
Mr. DeSantis. I see.
Mr. Kennedy. Mr. DeSantis, you have 145 employees. How many of them are members of the union ?
Mr. DeSantis. None are members of the union, other than the bands and the bartenders ; yes, sir.
Mr. Kennedy. Were you ever approached about having your em- ployees made members ?
Mr. DeSantis. I have been approached.
Mr. Kennedy. And by whom were you approached ?
Mr. DeSantis. I was approached by Mr. Trungale.
Mr. Kennedy. Of local 394?
Mr. DeSantis. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12909
Mr. Kennedy. And he wanted to organize your restaurant?
Mr. DeSantis. That is correct.
Mr. Kennedy. How long ago did he make the approach to you?
Mr. DeSantis. Maybe 8 or 9 years ago.
Mr. Kennedy. And wliat arrangements did you make at that time ?
Mr. DeSantis. I didn't make any arrangements. I told him that it was his prerogative to go and organize the waitresses as he saw fit, and I told him that I was in debt up to my neck. I did not think that I could pay anything, and if he felt that the waitresses should belong into the union, then he should go right ahead and organize them and put them in.
My first 3 or 4 years in business represented a $35,000 loss, and I was left alone, pretty well, through my early years in business.
Mr. Kennedy. But did he organize the waitresses ?
Mr. DeSantis. No, sir.
Mr. Kennedy. Did he organize anyone in the restaurant?
Mr. DeSantis. No, sir.
Mr. Kennedy, That was the end of it, then ?
Mr. DeSantis. That is right.
Mr. Kennedy. Nothing happened ?
Mr. DeSantis. No, sir ; other than I would say in the period of the last 6, between the last 6 and 8 years when he approached me I have given him $100 on different occasions. It might be 6 or 8 times.
Mr. Kennedy. You have given him $100 or about $100 about twice a year ; is that it ?
Mr. DeSantis. No ; not that many times.
Mr. Kennedy. Approximately twice a year ?
Mr. DeSantis. No ; I would say about 9 months, or close to a year, and I would always tell him that it was his prerogative to go in there and organize the waitresses as he saw fit.
Mr. Kennedy. And you gave him that money in cash ; did you ?
Mr. DeSantis. Yes, sir.
Mr. Kennedy. And he would just take the money and leave then, would he?
Mr. DeSantis. That is right.
Mr. Kennedy. When was the last time you paid him off like this ?
Mr. DeSantis. Eight or nine months ago.
Mr. Kennedy. Is he the only union official that you gave any money to?
Mr. DeSantis. That is correct, sir.
Mr. Kennedy. Did you make any other gifts to him ?
Mr. DeSantis. A case of Scotch at Christmas time, and that is it.
Mr. Kennedy. What about O'Connor ?
Mr. DeSantis. O'Connor? This past Christmas was the first time I ever gave him any money. I gave him a check for $30, and the reason I gave him the check for $30 was sooner than give him some liquor or it looks like that he could use the cash. I figured in my own commonsense the best thing for me to do was to give him a little cash. Kight in with that check that I gave Mr. O'Connor, I also gave $6,250 to all of my employees, and a few other people in there that have been nice to me and I have given them gifts like that.
Mr. Kennedy. Did you make any other gifts to O'Connor ?
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IMPROPER ACTIVnES IX THE L.\BOR FIELD
APrXNOON 6ES8IOX
(At the reconveniiifr "f tk session, tho followinp nuMuhers were present : Senators ^fcCIellan ad Goltlwater. )
The Cjiaihman. The hrang will eome to order, (^ill the next witness.
Mr. Kennedy. Mr. Tony I Saiitis.
The Chaikman. Do you srimnly swear the evidence you shall give before tliis Senate seleet ronuittw shall Ik* the truth, the whole truth, and n()thin<f hut thetruth. soL»lpyou(Jcxl *
Mr. DeSantis. I do.
TESTIMONY »F ANTHONY DcSANTIS
The Chaikman. State y<n name, your place of residence, and your business oroeeupation.
Mr. DeSantis. My nanu'i Anthony I>e.Santis. Mv pla<*e of busi- ness is the Martinique Kestarant, 2500 Went 94th Pliice, KverL'reen Park, III.
TheCiiAiHMAN. You wai^ counsel, do yon. Mr. De.Santis?
Mr. DeSantis. Yes, sir.
Tiie Chairman. All ri;:h(Mr. Kenne<ly,pnK-o<Ml.
Mr. Kennedy. Mr. !)■<'!-. v..>i» i...i..iH-Mnt employs alx)ut what.
145 ])eoplt
Mr. DkSantis. Ye.s,sir; \.
Mr. Ki.NNEDY. It is one < _ restaurants in Chicajro, is it?
Mr. DeSantis. It is out t Chicaj^u. It now is one of the biggest; yes, sir.
Mr. Kennedy. It is one othe biggest ?
Mr. DeSantis. Yes, sir.
The Chairman. Do youvant to say it is one of the best, t<K), ami get in a phiL'?
Mr. 1 )k.'^antis. I certainl will.
]Mr. Kennedy. Do you lire a theater there also?
^Ir. DeSantis. Yes, sir J operate the Drury I.4ine .Summer The- ater, in conjunction with mrestaurant.
Mr. Kennedy. And yoiilso have some of the biggest bands in tlie coiintiY in the restauiant ?
ISIr. DeSantis. I play alhame bands : ves, sir.
^Ir. Kennedy. I thou;rhj'<*" would like to get that into the record.
Mr. DeSantis. Some of le bands, sir?
Mr. Kennedy. No; just le fact that vou have them.
Mr. DeSantis. I see.
Mr. Kennedy. Mr. DeSntis. you have 145 einplovees. J I of them are members of tliunion (
Mr. DeSantis. None arniembers of the union, other t\\ and tlie bartenders : yes. sii
Mr. Kennedy. Were ya ever approached ah ployees made member ?
Mr. DeSantis. I have bm approache<lj
Mr. Kennedy. And l)y bom were
Mr. DeSantis. I was aproarjied
Mr. Kennedy. Of looal »4 ?
Mr. DeSantis. Y.'< --
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IMPROPER ACrrV'ITIES EN' TH L.\BOR HELD
12909
Mr. Kennedy. And he wanted to orgaize your restaurant!
Mr. DeSantis. That is correct.
Mr. Kennedy. How long ago did he like tlie approach to yoo
Mr. DeSantis. Maybe 8 or 9 yeai*s ago.
Mr. Kennedy. And what arrangements iil you make at that tiB*
yir. DeSantis. I didn't make any arra^vmeiits. I loM him iw it was liis prerogative to go and organize le waitresses as he saw fil» and I tokl him that I was in debt up to myick. I did not '*"»^J»J I couhl i)ay anytliing, and if he felt tliat t - waitresses should ^'^'^ into the union, then he should go right ahul aud organire then IM put tlu'in in.
My Hrst '6 or 4 years in business representl a !>5.'t.<HKl loss, ami I *!• left alone, pretty well, through my early yers in business.
Mr. Kennedy. But did he organize the Mitrejises?
Mr. DeSantis. No, sir.
Mr. Kennedy. Did he organize anyonen the restaurant f
Mr. DeSantis. No, sir.
Mr. Kennedy. That was the end of if. tin ?
Mr. I )eSantis. Tiiat is right.
Mr. Kennedy. Nothing happened ?
Air. JVENNEDY. ^> oi uiiig na[)peneci : m
Mr. DeSantis. No, sir; other than I woul ^ay in th« period of llv ■
ast <■), iu'twi'on the last (i and s years wheiin' app i« I ha9 W
;iven him .Sl'H) on dill'eivnt occasions. It nrijht U* • .^
Mr. Kennedy. Vou have given him $l(K.')r al)out slwabo* r»»
Mr. Kennedy. Vou have irivcn a year: is that it'
Mr. I )ESANri8. No; not that many times.
Mr. Kennedy. Ai)proximately twice a yo:*?
Mr. DeSantis. No: I would say about 'J lont lis, or clow ItiiBt. and 1 wonld always tell him that it was his>rerogatire toflo a tM> and organi/t* the waitresses as he .saw fit.
Mr. Kennijjv. And you gave him that Dney in ca8li;44
Mr. DeSantis. Yes, sir.
Mr. Kennedy. And he would just take le money aadlw»( Would he?
Mr. DeSantis. That is right.
Mr. Kennedy. "When was the last time yo»)aid him oliii^'
Mr. I )eSantis. Kiglit or nine months ago.
Mr. Kennedy. Is he the only union ocial that ». money to t
Mr. T )eSanti8. That is correct, sir.
Mr. Kennedy. Did you make any othei
Mr. DeSantis. A case of Scotch at Chri-
Mr. Kennedy. What about O'Connor?
Mr. DeSantis. O'Connor^ This past C\\<t I ever gave him any money. I gave him reason I gave him the check for >=?)0 "• liquor or it looks like that he > - connnonsense the 1"-' ' Right in with tb to all of my en nice tome :iii<
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12910 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. DeSantis. No, sir. Possibly the year before I might have gave him 3 or 4 bottles of liquor, as far as I can recall.
Mr. Kennedy. Other than Trungale and O'Connor ?
Mr. DeSantis. No, sir.
Mr. Kennedy. "VAHiy did you make these payments to Trungale ?
Mr. DeSantis. Well, I tried to keep peace within my own res- taurant.
Mr. Kennedy. Did he work for your restaurant ?
Mr. DeSantis. No, sir. No, sir.
Mr. Kennedy. Well, it was in order so that he would not attempt to organize?
Mr. DeSantis. So that he would not attempt to possibly put a picket line or attempt to come in and say, "Well, you got to do this.'^ I just did not want to take any
Mr. Kennedy. Did he ever say to you unless you would pay
Mr. DeSantis. I have heard of it, yes, sir.
Mr. Kennedy. Did he ever say "Unless you pay me, I will put a picket line up" or did you just understand that you should pay him and you might have a picket line if you did not ?
Mr. DeSantis. No; he would say that I would have a picket line if I felt that I could not get within the realms of his organization. I have told him at least 10 times in the last 10 years that any time he sees fit to go in and organize my waitresses he was more than welcome to.
Mr. Kennedy. You made the payment in order to keep him away from the restaurant ?
Mr. DeSantis. The money I gave him, I would say yes.
Mr. Kennedy. Mr. DeSantis, you know that a number of the res- taurants, particularly in the North Side of Chicago, have to make pay- offs for protection, do you not ?
Mr. DeSantis. I have heard of it, sir, from this hearing.
Mr. Kennedy. No, I am not talking just about payments to any union officials. I am talking about payments to certain of the under- world in Chicago. You know that that goes on, do you not ?
Mr. DeSantis. I have heard that.
Mr. Kennedy. And you have heard that from other restaurant owners ?
Mr. DeSantis. No, sir.
Mr. Kennedy. You have experienced it yourself, have you not, Mr. DeSantis?
Mr. DeSantis. No, sir, never in the history of my business have I ever been approached by anyone that has said "You have to give me so much money so that you can do this and that."
Mr. Kennedy. No, but hasn't it been understood that amongst cer- tain of the restaurants in Chicago, including yourself, that there is a protective society that exists there, that certain kinds of payments will have to be made ?
Mr. DeSantis. I have heard that. That is the restaurant asso- ciation.
Mr. Kennedy. No, not just the restaurant association. I am talk- ing about payments to underworld figures in order to prevent your place being stinkbombed, or set on fire, and that kind of operation ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12911
Mr. DeSantis. That possibly is very true of a lot of business. But in the case of my business, for the type of operation that I have, and the type of clientele that I cater to, I have never been approached. The reason for that is very, very simple. I don't have a 26 game in my restaurant. I don't have a jukebox in my restaurant. I don't have a cigarette girl in my restaurant. I don't have a girl that is trying to sell you a doll. I have one of the cleanest establishments in the entire country, let alone Chicago. And as long as I am that clean, I believe they lay off of me.
That is my honest opinion.
Mr. Kennedy. You have heard it from other restaurant owners that they have to make payments ?
Mr. DeSantis. No, sir.
Mr. Kennedy. Wliere have you heard it, then ?
Mr. DeSantis. I haven't heard that, Mr. Kennedy, and I might have heard it hearsay. That I don't remember.
Mr. Kennedy. What was your answer when I asked you or dis- cussed this with you yesterday, Mr. DeSantis ?
Mr. DeSantis. That I sensed that there was a payoff?
Mr. Kennedy. No. What was your answer to me, do you re- member ?
Mr. DeSantis. Gentlemen, I don't remember.
Mr. Kennedy. Wlien we discussed whether certain restaurant own- ers have to make liquor purchases from certain people ?
Mr. DeSantis. I said that I bought a minimum of liquor from anybody that I thought had an affiliation.
Mr. Kennedy. Didn't you say that you did buy some liquor from a gangster operation ?
Mr. DeSantis. No; I would not — oh, no, I would never say that. We have one liquor house in Chicago that I have heard that had had affiliations, and I buy less than 3 — I would say I buy less than 3 percent of my liquor from this one said company. If I felt if they were giving me pressure as the Chair seems to think on this thing, then you would look in my purchases and you would find liquor purchases from people that have affiliations, you would find meat purchases from people
Mr. Kennedy. Why do you purchase even that 3 percent from that one liquor company ?
Mr. DeSantis. Well, it is very, very simple. Some of those liquor companies are exclusive on one line alone, and to keep a variation on my bar and in my restaurant, I may be forced to buy a small percent. That is No. 1.
The No. 2 reason that I buy off of that company at all is there is a little salesman that calls on me that was born and raised in my neighborhood, and I always feel that I would like to help him a little. I have told him right to his face that the reason I don't do more busi- ness with his company is the fact that I have heard that there were affiliations with this company and as a result I kept my purchases from his company at the minimum.
I will never buy from that company again.
Mr. Kennedy. Mr. DeSantis, what about when we had the talk about a payment to some of these gangsters and hoodlums and I asked
12912 IMPROPER ACTIVITIES IN THE LABOR FIELD
you about some of these restaurants that had been stinkbombed, and some of the ones that had been set on fire. Do you remember what your answer to me about that was ?
Mr. DeSantis. Well, I have been confused, and I am not a lime- light guy. I am a fellow that works in a T-shirt all day, but if you will tell me what I said, I will verify it if I said it.
Mr. Kennedy. Do you remember about the fact that "You and I could sit down here for hours and hours and I would tell you the an- swers to these questions if I didn't have a family and didn't live at my restaurant?"
Mr. DeSantis. Yes; I remember saying that to you, Mr. Ken- nedy.
Mr. Kennedy. Isn't that the reason that this has not been broken up in the past, because there are people such as yourself that have information, that are scared to go to the police and go to the Govern- ment officials ?
Isn't that the great problem ?
Mr. DeSantis. That seems the great problem.
Mr. Kennedy. I don't want to make you the scapegoat on it, but we have established through other restaurant owners that they have to make payments to this protective organization that operates in Chicago. It is not just unions, but the gangsters and hoodlums that operate this and say that, "Unless you do, you are going to get a stinkbomb in your restaurant or it is going to be set on fire."
You know that that has been going on for many years, do you not, Mr. DeSantis?
Mr. DeSantis. That is probably right.
Mr. Kennedy. Of course, if people such as yourself would just come in and help, and give tliis information, then this thing could be broken up.
Mr. DeSantis. There, again, Mr. Kennedy, you must sense that the type of operation I have I don't invite that type of environment, and I am not bothered by those types of people, as of now. There is one more thing about all this. Anything that I might hear is hearsay, and I feel that all these tilings that I hear might be true and might be not true. I know you people have a major problem in correcting this whole situation in Chicago. But you have got to let us little people who have to live in that area, let us go home in peace and pass some good laws here that will give us the protection. You will see that every restaurant ow^ner in that area, in the whole country, will fall in line.
The Chairman. Do you feel like you don't get protection from your local law and local officials ?
Mr. DeSantis. No, sir ; I could very
The Chairman. You say we need to pass some good laws.
Mr. DeSantis. Yes, sir.
The Chairman. All right. Maybe we do. But what about your local situation, your local authorities ?
Mr. DeSantis. Well, I am in a little village called Evergreen Park. We only have 19 policemen on the entire police force. In my opinion, it is the best police force in the country. They have been very good. No one ever in the history of my being in business in that town has ever approached me from the police force.
IMPROPER ACTIVITlr^S IN THE LABOR FIELD 12913
The Chairman. Do you feel that you need your Federal Govern- ment to pass laws to protect you, then ?
Mr. DeSantis. In the case in the trouble we are having now, I do.
The Chairman. What trouble? What are you referring to, the trouble you are having now ?
Mr. DeSantis. The trouble is you are stating, this committee is stating, that a lot of these waitresses are underpaid, that we are subject to payoffs, et cetera, et cetera.
The Chairman. In other words, extortion, coercion, the imposition on you.
Mr. DeSantis. That is correct.
The Chairman. And you actually paid this fellow Trungale because you wanted to keep peace, didn't you ?
Mr. DeSantis. That is correct. Senator.
The Chairman. This fellow O'Connor, you gave him a little hand- out, too.
Mr. DeSantis. $30.
The Chairman. Yes. Did you know him that well, did you love him that much, was he that kind of a friend ?
Mr. DeSantis. No, but I felt that Mr. O'Connor, being a union agent, could have possibly been real rough to me, and he was pretty nice. Come Christmas, I said, "All rightie, young man, here is a check for you." I put it right in my books.
The Chairman. Now let me ask you : The $100 that you paid to this Trungale, did that ever go into the union treasury?
Mr. DeSantis. Gee, I don't know. I don't belong to the union.
The Chairman. You seriously doubt it, don't you ?
Mr. DeSantis. I do.
The Chairman. So it is just a form of a shakedown. They come around and say, "We can give you a picket line. What do you want to do about it ? Do you want to take care of me ? "
Mr. DeSantis. I think that is right. i
The Chairman. It is j ust about that ?
Mr. DeSantis. Yes, sir.
Senator Goldwater. How long have you been in business?
Mr. DeSantis. Ten years.
Senator Goldwater. How old are you ?
Mr. DeSantis. Forty-four.
Senator Goldwater. How long do you expect to be in business ?
Mr. DeSantis. As long as God is willing to let me stay in business and maintain my good health.
Senator Goldwater. As long as you can afford the payoffs?
Mr. DeSantis. Well, I have not been hit too hard from what I have been hearing through this committee.
Senator Goldwater. Do you think you are pretty lucky, then i
Mr. DeSantis. I do, and I think I should be very thankful, because it was only 12 years ago, 12 or 15 years ago, that I worked m a factory and made 85 cents an hour.
Senator Goldwater. Do you know some of these hoodlums that shake you down have never worked in their lives ?
Mr. DeSantis. I sense that. ,
Senator Goldwater. They live like big fat leeches that live off ot people like you that wouldn't talk. What do you think we m the rest of the country think of your great city ?
12914 IMPROPER ACTIVITIES IN THE LABOR FIELD
All I have heard about Chicago in the headlines is starting with Al Capone and coming on down with the hoodlums of America, the "Who's Who" in gangsterism, living in Chicago. Why can they live there? They don't live in that kind of attention-getting lime- light in the rest of this country, with the exception of a few cities. Don't you think that if some of you people in Chicago in business were willing to say "It might cost me a little bit, I might even get hurt physically, I mi^ht lose my business, but it might be worth it to clean •up the second biggest city in the United States," and to clean it up not only for yourself but for your children and for the rest of the people of this country ; don't you think you have some responsibility there?
Mr. DeSantis. I certainly do, Senator Goldwater, but I feel as small as I am, that the big decisions have to come here from Wash- ington. Get in there and pass some good, honest-to-goodness laws, with teeth in them. I have heard you speak up there before, where you said, "Let's get some teeth into these laws and let's make this thing run right."
I believe you are right, but there's nothing a little guy like myself can do.
Senator Goldwater. Yes, there is. We are not going to put teeth in laws until people like yourself are willing to come to Washing- ton, or willing to go to Springfield, or willing to go before your council in Chicago, and say, "Look, here is what is happening to me. Here is why we need laws."
We have known about these hoodlums and gangsters in Washing- ton, I guess, since Al Capone first beat somebody over the head with a baseball bat, or since the St. Valentine's Day massacre, I don't know how many years ago.
Wliat have we done about it? We have not done much about it because most people wouldn't cooperate with law-enforcement agen- cies. We can hold these hearings until all hell freezes over, and I suggest we would not be able to pass laws until some people tell us what it is about. You are giving Mr Trungale a case of Scotch for Christmas or a hundred dollars or Mr. O'Connor $30. That is not the kind of thing we are interested in and you know it. We are in- terested in the racketeers who will not go out and work for themselves ; who, ever since the repeal of prohibition have been allowed to live off of the other people, like leeches. They can live oil of the people as small as you. Your Government can't stop it unless you are willing to help the Government stop it. That goes from the Chicago level to where you are sitting now. I am serious about it. You have heard me speak about putting teeth in laws. We had an opportunity re- cently to put teeth in a law. We came out with a pretty soft gummed effect. It will not help the workingman. If you are not willing to talk, I don't think you can expect us to do more than listen to the troubles you want to talk about.
Mr. DeSaxtis. Yes, sir.
Mr. Kennedy. The reason you won't talk is because you are scared, is that right ?
Mr. DeSantis. I wouldn't say that. Actually I am scared. I feel that every man — and don't misunderstand me, I am not saying that I don't want to talk, or that I know anything that I should be telling
IMPROPER ACTIVITIES IN THE LABOR FIELD 12915
you. That isn't the story. I haven't been approached by anyone to say "you buy this," or "you do this," but I feel in my case I don't have that problem.
But where you have these other spots that have that problem, my answer to that one might be that a lot of these people feel that there will be reprisals.
Mr. Kennedy. I am talking about you, and you have some informa- tion, some facts on these things, and the reason that you won't give them to the committee is that you are frightened; isn't that right?
Mr. DeSantis. I don't have any.
Mr. Kennedy. Now, again we go back to the conversation that you confirmed — and I asked you about these matters because we had it from other sources — about these payments, as Senator Goldwater stated, to gangsters and hoodlums beyond the payments to some union officials that you have spoken about today.
There are payments by the owners of these restaurants to gangsters and hoodlums, and if they continue to make the payments these restau- rants are either stink-bombed or set on fire. That has been going on for a number of years in Chicago ; isn't that right ?
Mr. DeSantis. That is correct.
Mr. Kennedy. I asked you about that, and you said, "Well, I would give you the information, and we could talk for hours here, but I live in the restaurant, and my children live there."
Mr. DeSantis. And I also stand a chance that something would happen to my family.
Mr. Kennedy. That was the reason, and the reason you won't give the information is that you are frightened ?
Mr. DeSantis. I don't have any information, and I haven't been approached that way. The only information I have in that regard is what I have heard right from this committee, all last week on TV. I have that fright, and that is right. I haven't slept for months due to some of the thnigs that have happened in our area, but you have got to remember one thing. All of us are in that same boat.
We need help, but I don't know where to put my finger and say, "this man did this, or did that," but when I pick up the paper and I read this spot has been put on fire or bombed.
Mr. Kennedy. Has any place next to you been bombed or put on fire?
Mr. DeSantis. Richard, I believe.
Mr. Kennedy. How far is that from you ?
Mr. DeSantis. Two blocks away.
Mr. Kennedy. What happened ?
Mr. DeSantis. All I remember is that I understand they had a bomb thrown in the place, and there wasn't much damage, $4,000 or $5,000.
Mr, Kennedy. How long ago was that ?
Mr. DeSantis. I honestly don't remember, and I think it is in the neighborhood of 6 to 10 years.
Mr. Kennedy. Don't you know that this is still going on, Mr. DeSantis, and that these restaurant owners have to pay so much money each month to these gangsters ?
Mr. DeSantis. I have heard that last week.
12916 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Not only last week, and you knew it before that, Mr.
DeSantis.
Mr. DeSantis. Well, you might think so, Mr. Kennedy, but if you will ask any one of your committee members the way I live, and what I do, you would have that answer in a minute. I only say there, and I never wear a suit but maybe once a month, and I don't mix with the customers, and I stay in my own business and work 13 or 18 hours a day, in a white shirt, and your committee has been in at 10 o'clock at night and in the morning, and the only time they came in they found me working. I have a philosophy "you stay at home and work hard and mind your own business," and you will get by.
Mr. Kennedy. You were staying at home minding your own busi- ness and you were paying Mr. Trungale $100 every 8 or 9 months, and it is not a question of just staying at home. These people can come to your liome. It wasn't a question yesterday of not having any infor- mation, the question was "I could talk to you for hours, but I am afraid for my family, we live in the restaurant."
I sympathize with you, and I say that we have restaurant owners that come and give us this on a confidential basis, and none of you will talk, and it makes an impossible situation for the law^-enforcement officials. They can't do anything unless some of you give some infor- mation on them. It can't be their fault, if no restaurant owner in Chicago will cooperate one single bit with them.
Mr. DeSantis. I am doing the best I can within the power of my heart and conscience.
The Chairman. Do you have some information that you would be willing to give us in an executive session ?
Mr. DeSantis. No, Senator. I don't have. All I could possibly ever say is I have heard this, or hearsay things. You have got to remember that I am not in that area of Chicago. I don't belong to the restaurant association.
The Chairman. But you are sufficiently convinced that you have an apprehension about it, from what you have heard ?
Mr. DeSantis. Sir?
The Chairman. From what you have heard, you say all you can say is what you have heard. I say out of what you have heard, by reason of what you have heard, you have a serious apprehension about what might happen to you ?
Mr. DeSantis. That is correct.
The Chairman. And I guess all of you live under that state of fear and anxiety.
Mr. DeSantis. I believe every restaurant owner in the city of Chicago feels the same way.
The Chairman. That is what I am saying.
Mr. DeSantis. You are right. Senator.
The Chairman. It is a state of atmosphere or a climate of fear that is generated out of these gangsters and the shakedown artists and so forth ; isn't that true ?
Mr. DeSantis. I think so.
The Chairman, And you have plenty of evidence that they will, and they have in the past resorted to violence to enforce their will ?
Mr. DeSantis. From what I have read.
The Chairman. You have seen some evidence of it too, haven't you, as well as what you have read ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12917
Mr. DeSantis. No, I don't think so.
The Chairman. You saw the restaurant 2 blocks away from you?
Mr. DeSantis. No. I am 2 blocks away from it now, and I was at another location when that thing happened. I was about a mile away, and now I am exactly 2 blocks away, and I have a new restaurant now.
The Chairman. Whether you have seen it or whether you have heard it, you have information that causes you to be very appre- hensive.
Mr. DeSantis. That is correct, Senator.
The Chairman. It has been convincing to that extent ?
Mr. DeSantis. Yes, sir.
The Chairman. All right, is there anything further?
Mr. Kennedy. We are going into your wage scales, and I think that you have a statement that you wanted to make on the salaries ?
Mr. DeSantis. I don't have a statement that I want to make. It so happens that all I have been hearing on this network in Chicago is that all of the waitresses are underpaid. So when I received my call Saturday morning to be here, I figured the only thing for me to do was to supply all of the information that I can, so that I might have a sensible answer to this committee as to why there are so many diver- sions of what a waitress should be paid in the city of Chicago.
No. 1, the conventional type throughout the country is 10 percent. The type that is being given today according to Emily Post in her latest book is 15 percent.
The Chairman. How much is that ?
Mr. DeSantis. Fifteen percent. So I went ahead and just before I left on Sunday morning, I gathered the guest checks of Saturday night, of all of the customers that liave a credit card or diners'. Those put the tip right on the guest check. I pulled all of those checks out, and I brought them here to Washington.
I find that, if you will wait until I get this turned around, of the 24 checks that the customer put the tip right on the guest check, I find that the average tip on these checks is 18 percent.
Senator Goldwater. What was the total of the tips ?
Mr. DeSantis. The total in amount of money ?
Senator Goldwater. Yes.
Mr. DeSantis. I didn't take that. I have it right here, though, and I can read them off to you.
Senator Goldwater. Would you read off just a few.
The Chairman. Just a few and you don't have to identify your customer, and just take the check and indicate the amount of the bill, and what the tip was.
Mr. DeSantis. Here is a check for $23.45, and the tip was $4, and it represents a 17-percent tip.
Mr. Kennedy. That must have been an expensive dinner?
Mr. DeSantis. Here is one for $76.50 and the tip was $15. Here is a check for $15 and the tip was $5. That represents a 32-percent tip.
Senator Goldwater. Mr. DeSantis, could you tell us, did one girl enjoy more than one of those tips that evening? Mr. DeSantis. Oh, surely.
Senator Goldwait:r. Just pick out by girl number, and do you have your waitress numbers on there ?
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IMPROPKR ACTVITIES IX THE L.\BOR KIELD
Mr. Kennedy. Not onl^Vast week, and vou know it before that, Mr.
Mr. Df.S.vnti.'^. AVi'U, yo mipht think w), Mr. Kfimody. but if you will ask any one of your , • . .ps i!u« way I livo, ami what I
do, you would have thai ui*-. I only say then', and I
never wear a .'iuit hut n a nuutth, and I don't mix with the
customers, and I stay in ij. <'"ii business ami work 13 or \H liours a day, in a white shirt, :nl your «onimittec has U'en in at 10 o'clock atni'<;ht and in themori ". . om. in they found
me w()rkiii«r. 1 hav.- ;i - and work hard
and mind y(mr own h vou wdl p*t l»y.
Mr. Kennkdy. Y<m. >^- •••.' " ' ness and you were payinuVlr. '1 n it is not a (|uestion <
to your iMtme. It w mat ion, tluMjuestioi for mv family, we li\i
>ni(> minding your own busi-
«H» pvi'ry H or J» months, and
:i«'. I'll' I'h* «'an come
l.iy of r ;; any infor-
ui \ou for houns but 1 am afraid
1 sympathize with youand I say that wp have restaurant owners
that come and "rive u ' - . i - . ,] \tas\s^ nn<l none <»f you will
talk, and it makes -n for tho lawiMiforcement
•me of .if no •It withlheni.
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oine infor- it owner in
.... jMiwer of my
tuniiation that you would
. V. All I couhl |K>s>ihly ever
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ipo. I don't belonjf to the restaurant
ollicials. They can r mation on them. 1 Chicago will cooi)er:i
Mr. DkS.ANTIS. 1 inn uiii^ ill.
heart and conscience. I
The CnAiKMAN. I be willinjrto cjivr u-
Mr. Df.Saxti.'^. N say is 1 have heard i that I am not in that association.
The Chairman. I'.iii on are sufliciently convinre<l that you have an a|)prelH'nsion aljoui itfrom what you have heard (
Mr. DeSaxtis. Sir ^
The Chairman. Fkh what you have heard^ you saj' all you can say is what you have lurd. I say out of what you have heanl, by reason of what you li:i\ cieard, you have a serious apprehension al)out what miofhr happen t<i va C
Mr. DeSantis. That ;correct.
The Chairman. Ami guess all of you live under that state of fear and anxiety.
Mr. DeSantis. I beive every restaurant owner in the city of Chicairo feels the same wy.
The Chairman. Tliais what I am saying.
Mr. DeSantis. Y(.ii :e right, .'>enato*r.
The Chairman. It ia state of atmosphere or a IS generated out of the» gangsters and the shak forth; isn't that t rue ^
Mr. DeSan-tis. I this so.
The Chairman. ArKyou h.ave plenty of they have in the pasr re>rted to violence to
Mr. DeSantis. P^rouwhat I have read
The Chairman. Yoihave seen some as well as what you havread?
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IMPROPER ACTIVITIES IN HE LABOR FIELD
12917
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Mr. DeSantis. Xo, I don't think so.
The Chairman'. You saw the restaiant 2 blocks away from you \
]Mr. DeSaxtis. Xo. I am 2 blocks aay from it now, and I was at another location when that thing happaed. I was about a mile away, and now I am exactly 2 blocks away, an I have a new restaurant now.
The Chairmax. A\niether you havtseen it or whether you have heard it, you have information that auses you to be very appre- hensive.
Mr. DeSaxtis. That is correct, Senair.
The Chairmax. It has been convinci^ to that extent ?
Mr. DeSaxtis. Yes, sir.
The Chairmax. All right, is there arthing further?
]\Ir. Kexxedy. AVe are going into lur wage scales, and I tliink that you have a statement that you wnted to make on the salaries \
Mr. DeSaxtis. I don't liave a statement that I want to make. It so happens tliat all I have been hearinjon this network in Chicago is tliat all of the waitresses are underpait So when I received my call Saturday morning to be here, I figure the only thing for me to do was to supply all of the information tiit I can, so that I might have a sensible answer to this committee as t wliy there are so many diver- sions of what a waitress should be paidn the city of Chicago.
Xo. 1, the conventional type througDut the country is 10 percent. The type tliat is being given today atording to Emily Post in her latest book is 15 percent.
The Chairmax. How much is that ?
Mr. DeSaxtis. Fifteen percent. Sol went ahead and just before I left on Sunday morning, I gatheredhe guest checks of Saturday night, of all of the customer that have credit card or diners'. Those put the tip right on the guest check, bulled all of those checks out, and I brought them here to "Washin^on
I find that, if you will wait until I et this turned around, of the 24 checks that the customer put the t) right on the guest check, I find that the average tip on these checkss 18 percent.
Senator Goldwa'it,r. What was the toil of the tips ?
Mr. DeSaxtis. The total in amount c money?
Senator Goldwatek. Yes.
Mr. DeSaxtis. I didn't take that. have it right here, t- and I can read them oil" to you.
Senator Goldwater. "Would you readff just a few
The Chairman. Just a few an^«g||^ don't have customer, and just take the chec^ tte the
and what the tip was. A
Mr. DeSaxtis. Heiv ■ • lieB ^
it represents a l7-po
Mr. Kexxedy. 1 1
Mr. DeSaxtj is a check *' tip.
Senat enjqj
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12918 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, DeSantis. I have waitress number on here.
Senator Goldwater. Shuffle through, and take a number, the first number you con through, and see how many that girl waited on.
Mr. DeSantis. That is very interesting.
Here is 31, and that is waitress 31. One check was $15 and she re- ceived $2.50, and liere is a good one, another check was $33.15, and she received a $10 tip. Now let me see if that same waitress — here is another check for that same waitress, and here is a check for $14.20, and she received a $10 tip.
That one particular waitress as I add it up, right there has made $22.50 plus her salary of 42.5 cents an hour for the amount of hours she worked that niglit.
Senator Goldwater. There are tips in cash, too ; is that right ?
Mr. DeSantis. This is on their guest check.
Senator Goldwater. There are some that don't use that service ?
Mr. DeSantis. Naturally, a lot of customers just pay their tab and then they give a tip. In the case of my restaurant, where I haven't raised the price more than 5 percent in the last 10 years, and I sell a complete 7-course chicken dinner, with these named bands for only $2.25, you will find that every customer tliat comes in there feels that he hasn't been taken, and so as a result he leaves a good tip. It is the truth.
The Chairman. If that is a fair sample, a waitress might well pay you for the privilege of working for you '(
Mr.