Mr. TOBIN. Well, there was no attempt to-there was no attempt whatsoever at secrecy about that policy. You mean, did we issue a public release that the policy on the Columbia Street pier would be continued in the Knickerbocker Associates? No, we did not. Mr. MALETZ. Did you, by the way, clear this arrangement with Mallory Stephens with the board of commissioners? Mr. TOBIN. Oh, yes. Mr. MALETZ. Was that in the minutes? Mr. TOBIN. Oh, yes. My recollection is that it is. Mr. MALETZ. Did the minutes indicate that Mr. Stephens was to get the money for not doing any work? Mr. TOBIN. Sorry? Mr. MALETZ. Did the minutes indicate that Mr. Stephens' firm was to get the money for not doing any work? Mr. TOBIN. No, I think the minutes would simply indicate that the broker on that fire insurance policy was the Knickerbocker Associates. Mr. MALETZ. I see. Mr. MEADER. Mr. Chairman, might I ask a question? I would like to address my first question to Mr. Frelinghuysen. We talked about the cancellation of existing insurance on the Columbia Street pier, and the issuance of new policies which you serviced, but on which the Knickerbocker Associates were to receive the brokerage fee. My impression was that whatever insurance was thereby canceled-was canceled at that time-had not been serviced by the Knickerbocker Associates. Do you have any recollection on that? Mr. FRELINGHUYSEN. No, sir; I do not. We will include that information in the letter which we are about to prepare. (The information appears at pp. 1932-1935.) Mr. MEADER. Your testimony, Mr. Tobin, seems to be clear and unequivocal that the Knickerbocker firm continued as broker after the acquisition of the propery by the Port of New York Authority, uninterruptedly. Mr. TOBIN. That is my recollection. Mr. MEADER. That there was no gap when they did not have that account? Mr. TOBIN. That is correct. Mr. MEADER. Well, in that case, Mr. Tobin, if they had not only had the account, and done all the work on it, when the State had the property and after you had it, continuing on the same basis, why was it necessary to go through this arrangement of canceling a policy which they were servicing already, and relieve them from doing the work in connection with that policy, and impose it on Mr. Frelinghuvsen, but let them continue to get the brokerage commission? Mr. TOBIN. I think basically because they were handling all of this type of insurance for us, and we had great confidence in their engineering studies and advices as to the proper amount of insurance that should be covered, and, generally, Congressman Meader, I think simply because we wanted the general services that Frelinghuysen would have available-just the same as today Frelinghuysen does a tremendous amount of work on all sorts of insurance within our own organization of self-insurance that the port authority carries. That is part of their job. 68911 061-pt. 2-20 Mr. MEADER. Well, let me read this memorandum again to you, Mr. Tobin. It is dated December 20, 1949, and it is initialed "J. S. F., Jr.," which I presume, Mr. Frelinghuysen, is yourself; is that correct? Mr. FRELINGHUYSEN. Yes, sir. Mr. MEADER (reading): Memorandum of conversation with Mr. Kushell on the Columbia Street Pier After considerable discussion the letter to Mallory Stephens was redrafted to include only fire, lightning, ECE, including pier and wharf endorsement, on the Columbia St. Pier. of "Five-year premiums total $85,190.56. An amount of $975,900, in policies dated May 1, 1949, is to be canceled as The CHAIRMAN. Just a minute. I don't want any pictures taken. Mr. MEADER (reading): and rewritten for a period of years. These policies will be handled through Knickerbocker Associates as specified in Mr. Kushell's letter. Mr. Bennett is preparing the detailed figures and setting them up for cancellation. I cannot understand why there was any need for cancellation of a policy handled and serviced by Knickerbocker Associates, upon which they had been performing actual services, and converting to a system where that work would be done by Frelinghuysen, but the payment for it would be received by Knickerbocker. Mr. HOLTZMAN. Would you yield at that point? Mr. TOBIN. I would have to guess at the whys. I can guess that we wondered whether or not there ought not to be more insurance. This is a guess. It is 11 years ago. Also-and we would want that engineering work done in the regular forms we were used to with Frelinghuysen Co., that they would do it. But that, Congressman, is a pure guess. I don't know. I don't remember. Mr. HOLTZMAN. Mr. Frelinghuysen, could the reason, or the answer to the question just propounded by Mr. Meader, be that you did in fact get an override in connection with the cancellation and change of designated broker and agent? Could that be the reason? Mr. FRELINGHUYSEN. It could be, but not necessarily. Mr. MALETZ. Mr. Chairman-Mr. Tobin, was there any significance to your canceling the brokerage commissions to Mr. Stephens' firm in the year that he left the assembly? Mr. TOBIN. None that I recall. We were then going into the FIA. Everything was going into it. Mr. MALETZ. It was a pure coincidence, I take it? Mr. TOBIN. Pure coincidence that we were changing the whole form of our fire and casualty insurance at that time. Mr. MALETZ. Mr. Tobin, who is Thomas Morrison-do you recall now? Mr. TOBIN. I recall it as a name. I never met the fellow in my life. He was an insurance broker, I know. Mr. MALETZ. Anything else? Mr. TOBIN. Not the slightest. Mr. MALETZ. You mean you don't know? Mr. TOBIN. I never knew the man. The CHAIRMAN. Mr. Tobin, you became director when? Mr. TOBIN. In 1942. The CHAIRMAN. Then for a period, while you were director, this socalled patronage multibroker system continued for a period? Mr. TOBIN. Yes, it did, sir. The CHAIRMAN. For a period of 10 years? Mr. TOBIN. Well, by 1946 or 1947, I think we were well on our way to getting rid of that. The CHAIRMAN. But you didn't get rid of it completely until 10 years had elapsed? Mr. TOBIN. No, not completely. Mr. HOLTZMAN. Mr. Tobin, I show you this memo, and ask you whether you have any recollection of preparing it, or seeing it. Mr. TOBIN. No, I have no recollection of it. But I am not saying that-Congressman, upon establishment, or checking the records—I am not saying I didn't. I have no reason to say it. I just don't want to say I recall a draft. Maybe I can be helpful. The corrections on this in handwriting Mr. HOLTZMAN. Those are Mr. Frelinghuysen's. That has been established. Mr. TOBIN. Yes. Mr. HOLTZMAN. Mr. Frelinghuysen, do you recall where you got that memo from? Mr. FRELINGHUYSEN. I believe, Congressman, I testified before that because of the fact that my handwriting is on it, I presume that it was drafted in my office. Mr. HOLTZMAN. I see. Now, the last paragraph of that letter indicates that renewals of this particular policy would be handled in the same or similar manner for the ensuing 5 years after the expiration of the policy; is that correct? Mr. FRELINGHUYSEN. No, sir, it doesn't say anything about 5 years. Mr. HOLTZMAN. Supposing you read the last paragraph. Mr. FRELINGHUYSEN (reading): It is understood that future renewals of this schedule of insurance will be handled through Knickerbocker Associates in a similar manner. But it doesn't refer to the 5 years. Mr. HOLTZMAN. All right. Now, can you tell us where you got this information? Was that suggested to you by the port authority? Mr. FRELINGHUYSEN. I would have to assume so, sir. Mr. HOLTZMAN. You would have to assume so. So that certainly after the expiration of the initial policy, it was at that time intended. to continue this arrangement with Knickerbocker for an additional 5 years; is that correct? At least for one further renewal. Mr. FRELINGHUYSEN. I really can't answer that. Mr. HOLTZMAN. Well, now, that memo says that renewals will be continued in the same or similar manner with the Knickerbocker people, and that presupposes that 5 years would have elapsed, because this was a 5-year policy. Isn't that correct? Mr. FRELINGHUYSEN. Well, sir, you are asking me to testify to something that was in the minds of port authority officials, and I can't tell you. Mr. HOLTZMAN. No. I am asking you to interpret what you read at that time, and some of which you corrected in your own handwriting. And that does not appear to have been corrected. Mr. FRELINGHUYSEN. Well, may I see the final version of this letter? Mr. HOLTZMAN. Yes, you may. You have no recollection after looking at that, do you? Mr. FRELINGHUYSEN. Of what, sir? Mr. HOLTZMAN. You have no recollection as to whether or not Knickerbocker was to continue on the line after the expiration of the first 5-year term. Mr. FRELINGHUYSEN. You see, this paragraph has been eliminated in the final letter. Mr. HOLTZMAN. Yes; I am mindful of that. I am trying to find out what you or the authority had in mind when the original memo was initialed and changed by you-if you can remember. Mr. FRELINGHUYSEN. I can't remember, sir. Mr. HOLTZMAN. All right. Mr. MALETZ. Mr. Chairman-Mr. Tobin, do you know how much money Mr. Stephens' firm obtained during the period 1949 to 1952? Mr. TOBIN. No; I do not. Mr. MALETZ. Under this arrangement. Mr. TOBIN. No. Mr. MALETZ. Do you know how much he obtained in the period 1944 through 1949? Mr. TOBIN. No. Mr. MALETZ. Can you identify Lawrence Tremaine, Inc.? Mr. TOBIN. I can't identify Lawrence Tremaine, but I naturally would associate in my mind with Morris Tremaine, who was a distinguished comptroller of the State of New York for many years. Maybe that is very unfair. I don't even know whether he is a relative or not. But we had a comptroller of the State of New York for many, many years called Morris Tremaine. But this is Lawrence. Mr. MALETZ. Lawrence Tremaine. Inc., is another firm that was getting patronage from the port authority insurance, is that correct? Mr. TOBIN. If that list-yes. Mr. MALETZ. John C. Conklin Agency? Mr. TOBIN. There is a Conklin agency in New Jersey. I know that the fellow that runs it is interested in aviation, and he has been in, oh, I would say, twice to me in the last 10 years about aviation matters, and I know that is his agency. Mr. MALETZ. Well, John C. Conklin, Jr., was appointed, as I think I have indicated, a member of the State aviation commission of New Jersey in December 1946. Does that coincide with your present recollection? Mr. TOBIN. I know he was on the State aviation commission over there, which has no jurisdiction over the port authority. Mr. MALETZ. Robert L. Stevens? Mr. TOBIN. I don't know who he is at all. Mr. MALETZ. R. A. Corroon? Mr. TOBIN. There is a large brokerage firm in New York called R. A. Corroon. I don't know them at all. Mr. MALETZ. Wasn't there an affiliation between the Corroon Co. and Commissioner Byrnes? Mr. TOBIN. There was. I don't know what it was. I know Corroon was a friend of his. Mr. MALETZ. Is that the reason why the Corroon Co. got this commission? Mr. TOBIN. I haven't any idea. Mr. MALETZ. John R. Rogers? Mr. TOBIN. John Rogers is an insurance broker in New Jersey. That is all I know. I don't know him. Mr. MALETZ. Louis Tofte? Mr. TOBIN. I never remember hearing that name until I heard you read it out today. Mr. MALETZ. J. W. Clie, 5010 Park Avenue, Weehawken, N.J.? Mr. MALETZ. Stephen C. Griffith, Jr., Morristown, N.J.? Mr. TOBIN. I don't know him at all, or who he is. Mr. MALETZ. Frederick E. Rieger, in New York City? Mr. TOBIN. I don't know him at all, or who he is. Mr. MEADER. Mr. Chairman-Mr. Tobin, do you happen to know what brokerage fee was on this policy we have been discussing, where the Knickerbocker Co. got the brokerage fee? Mr. TOBIN. No. But I would ask that question-I would, personally-of Mr. Frelinghuysen. He knows. Mr. MEADER. Well, he didn't seem to know whether it was 10 or 15 percent. Mr. TOBIN. I don't know, Congressman. Mr. FRELINGHUYSEN. This material was all furnished to the committee. The schedule of commissions. Mr. McCULLOCH. Well, this information you may furnish in that letter Mr. MEADER. I just thought Mr. Tobin might happen to know. Mr. FRELINGHUYSEN. We will furnish it again. The CHAIRMAN. The committee will now adjourn to reconvene at 2:30. (The information appears at pp. 1932-1935.) (Whereupon, at 12:40 p.m., the committee recessed, to reconvene at 2:30 p.m., the same day.) AFTERNOON SESSION Mr. RODINO. The committee will come to order. Our first witnesses will be Mr. Austin J. Tobin, executive director, and Mr. James Doyle, director of finance. TESTIMONY OF AUSTIN J. TOBIN AND JAMES DOYLE Mr. GOLDSTEIN. Mr. Rodino, yesterday I think it was Mr. Meader and Mr. McCulloch, during the testimony of Messrs. Doyle and Olsen, asked for certain information in affidavit form regarding expenses incurred by them relating to items which were on the list submitted by Mr. Rand. That has been prepared. It is in affidavit form. I would like to submit for the record now the affidavit of James J. Doyle, sworn to on December 1, 1960, before Daniel Tannenbaum, a notary public of the State of New York, and the affidavit of John P. Olsen, sworn to on December 1 before Daniel Tannenbaum. Mr. RODINO. Mr. Goldstein, may we examine that before we accept it? Mr. GOLDSTEIN. Surely. |