by Ralph Nader WASHINGTON—The 1972 political primary campaigns have stressed the deep resent- ment of many small taxpayers over the loopholes and special tax priyileges secured by large corpoWmtions through Congress. Now, ‘after years of secrecy at the Treasury Department, a new chapter is beginning to un- fold about tax evasion and other illegal acts committed by ares corporations. Until about five years ago, it was routine practice for one or maybe two revenue agents to audit a giant corporation. It was an impossible task and the government knew it. Large firms with numerous divisions, subsidiaries and accounting centers around the country, staffed by a regiment of ac- countygdhs and tax lawyers, simply*were overwhelming to the hardest working agent. Yet the fiction persisted that the IRS was keeping tabs on such companies to insure their ‘com- pliance with the tax laws appli- cable to them. In the late 1960’s, the Trea- sury Department began to use a “coordinated examination pro- gram’ to audit about 1500 cor- porate giants which control about #8.000 taxable entities. The alas to have a team of five or Six auditors work on a large corporation and then move on to another firm in a quicker and more thorough way than the single auditor ap- proach permitted. Soon after the Nixon Adminis- tration took office, IRS director Randolph Thrower spoke of his concern over the rising number of pending cases against cor- porations which were accused of illegally contributing to political campaigns. A number of these cases were subsequent- ly settled in favor of the govern- ment. Mr. Thrower’s successor as head of IRS, Johnnie M. Walters, delivered a speech on corporate tax evasion last month to an industry associa- tion at a remote Georgia resort that went virtually unnoticed. But it contains enough informa- tion to warrant a Congressional review and public disclosure of what IRS has been finding out. Here is what Mr. Walters said: We are now examining re- cords untouched before, raising issues never. before raised. Some are alarming... Here are some examples: One large company whose stock is traded on the New York Stock Exchange grossly under- stated excise tax by use of many subterfuges. Violations were so flagrant that the company and two of its principal officers were indicted on criminal charges. Another large company pur- chased insurance from a for- eign firm. Rebates of $1 million to $2 million dollars a year were paid to a Swiss subsidiary. They were not reported by the parent. Another company deducted the cost of spare parts. It also depreciated the same items. The result, millions of dollars in double deductions, were claimed. We have uncovered other schemes, some involving Rick- backs and illegal payoffs. These transactions were intentionally covered up in one way or another. It is astounding that large publicly held corporations engage in such schemes. As a result of our findings we are going to emphasize uncovering tax fraud in large corporations . . These schemes usually are concealed or covered up by officers and employees who profit from unauthorized activi- ties. Mr. Walters then described the modernized audit pro- cedures and computer sampling techniques which will further his stated objective of locating these corporate crimes and re- commending prosecution of vio- lators. The tax system, he concluded, “does not apply to individuals only. It also applies to corpora- tions.’’ Those are welcome words to millions of working Americans. “The Flooding Monster’’ by Children from The Flood “The clouds came. They were filled with water; and the river got higher. The dikes broke and all the little rivers poured into the Susquehanna River. The whistle blew seven times and we had to leave. ‘We had to go somewhere so we could be safe. We had to go to a higher place to live. The river wr8ked our houses and God's house and it filled our air we breathe with stinky stuff. “Reasons 'why! the flood came: dikes’ bursted: New York's rivers poured into ours} the rivilf wanted the people to feel the way it felt; the Tropical Storm Agnes. The above masterpiece was composed by a group of chil- Louis Lamoreaux Completes Course Marine Pfc. Louis G. Lamoreaux of RD 1, Hunlock ' Creek, completed a specialized aviation Maintenance Course at Marine Corps Air Station, Cherry Point, N.C. The Bureau of Consumer Pro- tection of the Pennsylvania De- partment of Justice has opened a host of regional offices to better protect flood victims in areas of price gouging, shoddy workmanship, insurance com- plaints, nd unjustified time iy tin to Paul Judge, bureau investigator . headquartered in Scranton. Mr. Judge said Monday that his office had begun to process a host of complaints received from flood victims, and that re- gional offices were handling an influx of complaints. * The investigator said that during one morning he had re- ceived consumer complaints concerning the Gateway Apart- - ments where all tennants’ household goods and furniture had been thrown out by the apartment manager without the permission of the tennants; a complaigd that a trailer park in Nanticofe was charging an entrance fee of $600 for those persons wishing to park their trailers; and a supermarket overcharging customers in Exeter. Mr. Judge said that his branch offices in the flood areas were prepared to receive com- plaints and would issue to flood victims forms to be completed covering a host of consumer problems including home re- pair, insurance, and price goug- ing. Mr. Judge said that the bureau had issued stern warn- ings to victims of flooded homes ey dren of evacuated families who have been given shelter in the Dallas Senior High School. These youngsters have been spending many hours daily in the day care center at the school while their parents tackle the results of ‘‘the flooding mon- ster’” and work on restoring their homes. Nearly 20 children sat in a circle, and thoughtfully and cal- mly told staff members the story of what happened in their own words. The big story was printed in large letters and tacked” on the "wall “for ‘all visitors to see and ponder. These children are ‘being cared for by three capable as- sistants working under the direction of Keith Sylvester, a teacher at the Scranton Day Care Center, who has been as- signed to the Dallas Senior High School for the duration of the emergency. They handle ap- proximately 20 youngsters daily from the hours of 8:30 a.m. to 4:30 p.m. in the choral room at the school and outdoors when weather permits. The children range in age from one little fellow, eleven months old, asleep on a cot in the play room, to 12-year-olds that they should be particularly careful in selecting contractors for home repair, and contracts which less scrupulous contract- ors might use. Calling attention to a con- sumer protection manual for home repair available at any of the consumer protection offices, Mr. Judge said that homeown- ers should pay particular atten- tion to the manual’s six key points: —Get written estimates from several reputable contractors before making a selection. —Read the contract carefully before signing to make certain that it contains in detail all of the agreement which home- owners are making with the contractor. —Do not sign any contract with blank spaces left in it. —Obtain a copy of the con- tract signed by the contractor and keep it to protect your legal rights. —Remember that even after you sign the contract you may have aright to cancel it for up to three days. —If you are asked to sign a certificate stating that the work has been completed, do not sign unless the work has actually been finished to your satisfac- tion. Additionally, the manual calls attention to the manner in which a contractor is selected with emphasis never to deal with a company which does not have a permanent place of busi- playing football in the field out- side with Mr. Keith. The chil- dren appear to have adjusted well to their new surroundings and the friendly workers they spend their days with. One of the extra treats the youngsters at the Dallas Day Care Center have to look for- ward to each day are ‘‘the sur- prises from the soliders.’’ There are comic pictures of Mickey Mouse and Pluto and all their friends done for the children by National Guardsmen during their off-duty hours; head artist is’the very talented 'SC4 Ricéi; Co. A, 109 Infantry. The guards- men have also presented ‘‘the children of the flood” with a complete hockey game fashioned of clay and a minia- ture clay jungle which includes a violet-pink elephant with huge ears. All these extra attentions are thoroughly enjoyed by the chil- dren and give them a few hours away from the reality that their parents face each day. A later comment to the story of ‘The Flooding Monster” was made by one little tyke who made a visit to his West Side home: “My house is broken. My house is really all wet.” ness locally. The manual states that the contractor should be asked what work he can per- form and if other specialized work is needed. He should be asked when he would be able to begin work and how long it would take him to complete it. Consumers are also warned that they should obtain a written estimate from the con- tractor for the work he can per- form, and make certain it in- cludes the total price and is signed by the contractor. Consumers are also warned in the manual to remember to con- sider a variety of items in addi- contractor choice. After a contractor is selected, consumers are warned that the contractor should be asked to submit a written contract and that it should specify all work to be performed and should not be signed until all blank spaces have been filled in. The con- tain to have the total contract price contained in the contract, and should insist upon receiving a copy of the contract signed by the contractor or his authorized agent immediately, the manual states. Generally, contractors do not require more than a small down payment before be- ginning the work and home- owners should be extremely wary of salesmen of contractors who ask them to pay large amounts in advance. According to the manual, a Flood Volunteers To Contact Capitol Persons from the Penn- sylvania business community special talents and-or equip- ment in the flood recovery ef- fort now have a designated State Capitol telephone number to call. Pennsylvania Sec. of Com- merce Walter G. Arader has suggested those persons outside the Harrisburg area call the toll free number set up for the state’s Business Ombudsman-- (800) 232-0664. The State Department of Commerce will maintain a list of volunteers to match against needed services. Special talents could run from engineers to business consultants. Letter to the Editor: | Dear Residents of Dallas, We are in search of our ser- vice station watch dog. On Saturday, June 24, 1972, he ran from one of our workers who was being evacuated from his home'in Kingston. ‘He ran from him in the Dallas area. of ““Arco’’. He is part Collie and part Greyhound. He is light brown, long haired, with the long collie nose. He is very gentle and we feel that someone might have taken him in. If you have seen the dog or know of anyone who might have our dog, could you please call me at 474-9079 or at 822-9545. If the phones in Dallas are not in service please write to me as soon as possible. Thank you, Diane Chapracki 91 Fairview Park Mountaintop, Pa. 18707 Victims Gouging home improvement contract should include the following in- formation and provisions: 1. The name and address of the contractor as well as a phone number. 2. The name and address of the consumer as well as the address or phone number at which he can be contacted. 3. A commitment that the contractor will supply all materials and labor necessary for the repair of the residence. 4. A specific description of the work to be done and the mater- ials to be used, as well as a pro- vision requiring the consumer’s written approval for any and specifications. 5. A requirement that the con- tractor must obtain any neces- sary licenses, building permits or certificates. 6. A requirement that the con- tractor should procure work- men’s compensation and public liability insurance to protect himself and the consumer. 7. A requirement that the con- tractor agrees to perform all work in a workmanlike manner. 8. A provision setting forth the cost of the work and specific terms of payment for the materials and services. After the work is completed, the manual explains, if consum- ers feel they have a legitimate complaint about the materials or the manner in which the work was done, they should not sign the certificate of completion. For The Record ‘Congress Votes is'issued every week that Congress is in session. It covers all votes of record and reports the position taken on each measure by the elected official whose name appears below. = Daniel J. Flood 11th Congressional District, Pennsylvania Thursday, July 6, 1972 National Convention. Accordingly the next issue of CONGRESS VOTES will be dated July 20. Legislation considered in the final preadjournment hours included: H. Res. 1019 makes in order a motion to debate H.R. 14163 which sets up a program to reimburse ranchers for the value of domestic animals killed by predators. Yeas 102. Nays 260. Rule (H. Res. 1019) rejected, June 29. MR. FLOOD VOTED YEA. H. Res. 1030 makes in order a motion to debate H. R. 15692. Yeas 348. Nays 6. Rule (H. Res. 1030) agreed to, June 29. MR. FLOOD VOTED YEA. On the motion to debate H.R. 15692: Yeas 341. Nays 1. Agreed to. MR. FLOOD VOTED YEA. H.R. 15692 reduces interest rates on DISASTER LOANS made by the Small Business Administration retroactive to July 1, 1971. Before passage, there was one vote of record on an amendment offered by J. William Stanton: Whether to change the effective date to June 1, 1972. Ayes 161. Noes 163. Amendment rejected, June 29. MR. FLOOD VOTED NO. Whether to pass H.R. 15692. Ayes 325. Noes 9. Passed, June 29. MR. FLOOD VOTED AYE. Whether to agree to the conference report on H.R. 15585 which appropriates $5.1 billion for the operations during 1973 of the TREASURY DEPARTMENT and other agencies. Yeas 341. Nays 3. Agreed to, June 30. MR. FLOOD VOTED YEA. Whether to pass H.J. Res. 1238 which appropriates $200 million for DISASTER RELIEF. Yeas 355. Nays 1. Passed, June 30. MR. FLOOD VOTED YEA. Senate amendment No. 2 to H.R. 15390 increases SOCIAL September and makes changes in the amount of earnings subject to and rate of Social Security taxes. The Byrnes sub- stitute amendment cuts the increase in benefits from 20 to 10 percent. Yeas 83. Nays 253. Substitute amendment rejected, June 30. MR. FLOOD VOTED NAY. Whether to concur in Senate amendment No. 2. Yeas 302. Nays 35. Agreed to, June 30. MR. FLOOD VOTED YEA. Proc 5S Congress Votes is issued every week that Congress is in session. It covers all votes of record and reports the position taken on each measure by the elected official whose name appears Daniel J. Flood 11th Congressional District, Pennsylvania Thursday, June 29, 1972 The House began a busy week with consideration of H.R. tee up to $1.2 billion in revenue bonds issued by the WASHINGTON METROPOLITAN AREA TRANSIT AUTHOR- ITY. Yeas 282. Nays 75. Passed, June 26. MR. FLOOD DID NOT VOTE. HR. WATER PUBLIC WORKS PROJECTS during fiscal year 1973. Yeas 345. Nays 17. Passed, June 26. MR. FLOOD DID NOT VOTE. H.R. 15495 authorizes the appropriation of $21.3 billion for MILITARY PROCUREMENT during fiscal 1973. Before the final 'vote (see below), there were four votes of record on pro- posed amendments: The Leggett amendment cuts th SAFEGUARD ABM authorization from $888 million to $538 .aillion. Ayes 116. Noes 258. Rejected, June 27. MR. FLOOD VOTED NO. The Pike amendment cuts $445 million from the Air Force authorization and prohibits spending on the B-1 STRATEGIC BOMBER. Ayes 94. Noes 279. Rejected, June 27. MR. FLOOD VOTED NO. Another amendment offered by Mr. Pike continues an exist- ing prohibition on the construction of an ABM SITE in the WASHINGTON, D.C. AREA. Ayes 129. Noes 261. Rejected, June 27. MR. FLOOD VOTED NO. The Harrington amendment prohibits the spending of authorized funds to support U.S. MILITARY OPERATIONS in American prisoners of war. Ayes 152. Noes 244. Rejected, June 27. MR. FLOOD VOTED NO. Whether to pass H.R. 15495. Yeas 334. Nays 59. Passed, June 27. : MR. FLOOD VOTED YEA. H. Res. 1021 makes in order consideration of H.R. 15390 but prohibits the offering of amendments to the later bill. On a motion to move the previous question (vote on) H. Res. 1021: Yeas 206. Nays 180. Previous question ordered, June 27. ME: FLOOD VOTED NAY. H.R. 15390 extends until Oct. 31, 1972 the present PUBLIC DEBT LIMIT of $450 billion. Yeas 211. Nays 166. Passed, June 27. \ : MR. FLOOD VOTED YEA. On the conference report to H.R. 13955 which provides $513.8 million for the LEGISLATIVE BRANCH during fiscal 1973, the House voted: Yeas 381. Nays 8. Agreed to, June 28. MR. FLOOD VOTED YEA. Senate amendment No. 36 to H.R. 13955 prohibits the pre- paration of final plans to extend the WEST FRONT of the CAPITOL. The Casey motion forbids the start of construction but allows the preparation of final plans. On a motion to table (kill) the Casey motion: Yeas 186. Nays 206. Motion to table re- jected, June 28. MR. FLOOD VOTED NAY. On a motion to accept the Casey motion, the House by record teller vote: Ayes 181. Noes’ 197. Casey motion rejected, June 28. MR. FLOOD VOTED AYE. By voice vote the House then concurred in Senate amend- ment No. 36. On the conference report to H.R. 14734 which authorizes funds totaling $958.6 million during fiscal 1973 for the STATE DEPARTMENT and related agencies: Yeas 314. Nays 77. Agreed to, June 28. MR. FLOOD VOTED YEA. H.R. 15587 extends for six months the EMERGENCY UN- EMPLOYMENT COMPENSATION ACT and raises the federal unemployment tax rate during calendar 1973. Yeas 273. Nays 110. Passed, June 28. MR. FLOOD VOTED YEA. H.R. 15690 appropriates $12.9 billion to support the activities during fiscal 1973 of various AGRICULTURAL, ENVIRON- MENTAL, and CONSUMER PROTECTION agencies. Before being passed (see below), there were two record teller votes on proposed amendments: The Conte’amendment prohibits the payment of more than $20,000 to a person under any single 1973 price support program (other than sugar and wool). Ayes 189. Noes 192. Present 1. Amendment rejected, June 29. MR. FLOOD DID NOT VOTE. The Michel amendment prohibits the distribution of food stamps to families which need assistance because a family member is on strike. Ayes 180. Noes 199. Rejected, June 29. MR. FLOOD VOTED NO. Whether to pass H.R. 15690. Yeas 345. Nays 33. Passed, June 29. MR. FLOOD VOTED YEA. The House worked past midnight on Thursday to act on pending bills in order to be able to adjourn late Friday until after the Democratic National Convention. Friday’s votes of record week’s issue of CONGRESS VOTES. sl
Significant historical Pennsylvania newspapers