Mr. LEECE. The board of trustees gave Mr. Byers authority to appoint welfare deputies?

Miss HORNER. That is right.

Mr. LEECE. As I understand your testimony, they were paid 5 perrent of the premium sent to the carrier on behalf of the members of their particular local?

Miss HORNER. That is right.

Mr. LEECE. Did you send those checks to the welfare deputy?

Miss HORNER. Yes, I made the checks. They are not mailed directly by me. They are mailed by Mr. Dooley after he countersigns the checks. They are mailed from his office.

Mr. LEECE. But you made up the checks?

Miss HORNER. That is right.

Mr. LEECE. To whom were they made payable?

Miss HORNER. They were made payable to the individuals. In other words, the particular welfare deputy.

Mr. LEECE. Not to a welfare fund of the local?

Miss HORNER. No, that is right.

Mr. LEECE. Made to the welfare deputy as an individual?

Miss HORNER. That is correct.

Mr. LEECE. Was any accounting required by those welfare deputies as to the disposition made of those funds?

Miss HORNER. You mean-I don't understand your question.

Mr. LEECE. Let me put it this way: Have you on any occasion received from the welfare deputies a statement of any kind as to the disposition of those funds by that welfare deputy?

Miss HORNER. NO. It was my understanding that that was strictly their responsibility, the handling of those funds.

Mr. LEECE. In other words, they got 5 percent of the monthly premium in the form of a check, to do with as they liked?

Miss HORNER. No. It was to be handled strictly for the administration of the welfare department. That is the idea behind it.

Mr. LEECE. What was that idea? Will you enlighten us on that? Miss HORNER. That was for the operation of their welfare program in the particular locals. That was to pay for salaries of the people working on the welfare program, for equipment, for any expenses in regard to administering the welfare fund.

Mr. LEECE. Was not the union receiving $2,500 a month for that same service?

Miss HORNER. Not as far as I am concerned, they aren't. I have no knowledge of the union's books.

Senator ALLOTT. Did you know they were getting it?

Miss HORNER. I did not, Senator, until this hearing.
Senator ALLOTT. Never until this hearing?

Miss HORNER. No. Of course I have nothing to do with the international's books. So I cannot say whether they were or were not receiving that.

Senator DOUGLAS. Miss Horner, in executive session you identified this list as being the list of payments to the various welfare deputies. I wonder if you would be willing to identify that.

Miss HORNER. That is right, Senator. That is the list I gave you. Senator DOUGLAS. I want to ask that this be made part of the record of the public hearings at this point.

The document referred to was marked "Exhibit No. 31.")

Social Security Department, Laundry Workers' International Union,
30 West Washington Street, Indianapolis, Ind.

64.8

(9)

This local was serviced by local No. 248 from June 1, 1951, to Sept. 1, 1952.

4 Included with No. 218, now No. 218.

Included with No. 218.

Miss HORNER. I think you should put the qualification in there, too, that I set up these figures very hurriedly.

Senator DOUGLAS. I think it is of interest to note the following payments: Philadelphia, Pa., Charles Naddeo-and this is for the period ending September 30, 1954 $17,486.49. San Francisco, Calif., Lawrence Palacios, $16,461.20. Chicago, Ill., E. C. James, $77,970.33. Los Angeles, Calif., Floyd M. Buckalew, $21,544.32. I am simply reading off the larger ones.

Detroit, Mich., John Paris, $17,721.90. Then in Minnesota, Sidney Brennan was the agent up until March 1, 1954, St. Paul, Sidney Brennan, $1,950.37 and Joseph Williams became the deputy in April, apparently, $898.38.

Minneapolis, Sidney Brennan, $7,444.38, and Joseph Williams, $1.877.61, and Duluth, Sidney Brennan, $1,771.75. Joseph Williams, $510.72. I am simply adding in my head, but it looks like a total of something like $11,000 to Mr. Brennan.

Atlanta, Ga., E. L. Abercrombie, $18,477.87.

Jersey City, N. J., Mr. Reich, $17,490.45. I think in justice it should be said that in Jersey City we found that the money had been put into a separate fund.

Miss HORNER. That is the way in many cases.

Senator DOUGLAS. And it was not checked out for individual use apparently. We do not have a record of what happened to these other sums. The total amount paid, $238,076.28, according to our examination.

Miss HORNER. Senator, I think in all fairness, you should also point out that this is not for 1 year. This is from the very beginning, the inception of it. It covers 4-year periods for some of these locals. Senator ALLOTT. If there was a disposition made of money, Miss Horner, which is not the right disposition, it doesn't matter whether it is over a period of 10 years or 10 hours.

Miss HORNER. That hasn't been proven; that is true in all cases, though, Senator.

Senator ALLOTT. It is apparently true in every case that has been gone into.

Senator DOUGLAS. Jersey City

Senator ALLOTT. Except that one.

Miss HORNER. I think local 26 has a fund set up, too, a separate fund set up on their welfare. Local 26 in San Francisco. I know that specific one because Mr. Palacios has appeared before the board stating that this 5 percent is not sufficient to cover his expenses.

Mr. LEECE. May I ask you this, though, Miss Horner? Were these welfare deputies in every case members of the Laundry Workers International Union?

Miss HORNER. No, as you already know, Mr. Brennan is not. I don't know whether there was anything even specified in that welfare deputy agreement form, that they had to be. I haven't read it for

some time.

Mr. LEECE. This may not be a fair question, but as far as you are concerned, by what authority would a member of another union serve as a welfare deputy for the laundry workers?

Miss HORNER. Mr. Brennan

Mr. LEECE. Mr. Brennan got something over $11,000.

Miss HORNER. I am not too familiar with the international's policies, since I have never worked on anything of that type. But it is my

understanding that Mr. Brennan helped in negotiations, and he also helped in setting up the welfare plan in that area.

Senator ALLOTT. Miss Horner, you testified a while ago you didn't know what disposition was made of these welfare funds. How do you know there were, in some instances, special funds set up?

Miss HORNER. As I mentioned before, Mr. Palacios has a special fund I know set up, at least it was my understanding.

Senator ALLOTT. But you testified a while ago you didn't know what had become of these funds. You simply made the checks payable to individuals, the 5 percent.

Miss HORNER. What moneys?

Senator ALLOTT. Now you are testifying that they went into special funds.

Miss HORNER. I testified, Senator, as to how the money was to be used.

Senator ALLOTT. You said you didn't know how it was used, and now you are testifying that part of it went into special funds.

Miss HORNER. I don't remember saying that I didn't know how it

was used.

Senator ALLOTT. Who had the power to designate the welfare deputies?

Miss HORNER. As I mentioned before, it was Mr. Byers' duty.
Senator ALLOTT. Mr. Byers alone?

Miss HORNER. Yes; that is right, as far as I know.

Senator ALLOTT. You kept the minutes of the welfare board and the social security board. Did the social security department ever designate welfare agents?

Miss HORNER. Not to my knowledge, not at a board meeting, no. Senator ALLOTT. As far as you were concerned, then, and as far as you observed, Mr. Byers was the sole person who could designate who the welfare agents were?

Miss HORNER. That is right.

Senator ALLOTT. Did these two men from Security Mutual bring their own records and check against your records, or did they check your canceled checks against your records? Do you know?

Miss HORNER. That I wouldn't know, Senator. I would have no way of knowing.

Senator ALLOTT. Did you see them bring any records of their own? Miss HORNER. As I remember, they came in with some folders. What they had in them I don't know.

Senator ALLOTT. Did you have any knowledge of what Saperstein was doing with the money that was being forwarded to him at all? Miss HORNER. No, sir; I do not.

Senator ALLOTT. You mean as chief bookkeeper of the social security department and as the person who kept the minutes for the board and being in charge of those records, that no check was ever made of the moneys received by Security Mutual against the money which you have forwarded to Saperstein?

Miss HORNER. No, sir.

Senator ALLOTT. You had absolutely no knowledge of any discrepancy in those sums?

Miss HORNER. No: that is right

Senator ALLOTT. Until when?

Miss HORNER. Until this hearing, until your investigators were in my office.

Senator ALLOTT. Did you have knowledge that Saperstein was sending money to James?

Miss HORNER. I did not, sir.

Senator ALLOTT. Did any of the checks sent by Mr. Saperstein to the international ever come to your attention or to your office?

Miss HORNER. No, sir, not as far as the social security department is concerned.

Senator ALLOTT. Did it ever come to your office and to your knowledge in any other capacity?

Miss HORNER. No, sir.

Senator ALLOTT. Did you or anyone for you ever send an indorsement on any checks from Saperstein to the international union? Miss HORNER. No, sir, not me, nor anyone for me, I would say. Senator ALLOTT. As I understand it, you say you retained also in addition to all these other sums that you have been paid out of this fund, you retained part of it in your office to pay death benefits? Miss HORNER. That is right.

Senator ALLOTT. Did you have an agreement with the individual to that effect or the employers?

Miss HORNER. The employers knew that we paid a death benefit. I imagine it was their understanding that we would have to have something to pay it with.

Senator ALLOTT. Do you have a written agreement to that effect or a trust agreement?

Miss HORNER. We have a trust indenture that is signed by the employers.

Senator ALLOTT. Which provides that you shall retain part of this money to pay death benefits?

Miss HORNER. There is a section in that trust indenture on the death benefits.

Senator ALLOTT. Will you point it out to me? Do you have a copy of it?

Miss HORNER. No; I don't, sir.

Senator ALLOTT. We will get that.

In effect, then, you are carrying insurance upon the lives of your members?

Miss HORNER. Yes; you could say that.

Senator ALLOTT. Are you qualified and authorized to engage in the insurance business in the State of Indiana?

Miss HORNER. No, sir.

Senator ALLOTT. You are positive of that?

Miss HORNER. Yes, sir; we are not an insurance company.

Senator ALLOTT. Are you bonded?

Miss HORNER. No, sir.

Senator ALLOTT. Is Mr. Byers bonded?

Miss HORNER. Mr. Byers and Mr. Dooley are bonded.

Senator ALLOTT. Both those two are bonded?

Miss HORNER. That is right.

Senator ALLOTT. To the social security department of the union?
Miss HORNER. I believe that is the way the bond reads.
Senator DOUGLAS. Is Mr. James bonded?