(The document referred to at pp. 1460 and 1464 follows:) AFFIDAVIT STATE OF NEW YORK COUNTY OF NEW YORK } 88.: JOHN P. OLSEN, of full age, being duly sworn, according to law, upon his oath, deposes and says that: 1. Set forth below are expenses incurred by me during 1959 and 1960 as Insurance Manager for The Port of New York Authority in connection with business conducted by me with the designated J. S. FRELINGHUYSEN CORP. personnel on behalf of The Port of New York Authority: 2. The Port Authority made reimbursement to me for the aforesaid expense items representing a total amount of $396.48. Sworn to before me this 1st day of December, 1960 Daniel Jaxonten DANIEL TANENBAUM Notary Public, State of New York No. 24-3930200 Kings County Farm Expires March 30, 196 John P. Olsen PORT OF NEW YORK AUTHORITY FRIDAY, DECEMBER 2, 1960 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 5, The subcommittee met, pursuant to recess, at 9:30 a.m., in courtroom 705, U.S. courthouse, Foley Square, New York City, Hon. Emanuel Celler (chairman) presiding. Present: Representatives Celler, Rodino, Rogers, Holtzman, Toll, and Meader. Also present: Herbert N. Maletz, chief counsel; Julian H. Singman, associate chief counsel; Cyril F. Brickfield, counsel; and William H. Crabtree, associate counsel. Also present: Representative Ray. The CHAIRMAN. The committee will come to order. The Chair wishes to make a statement. This committee has operated under the greatest handicap since the Port of New York Authority has demonstrated a complete lack of cooperation. In addition, its representatives including the executive director, Austin J. Tobin, have resorted to tactics not befitting public officials. These tactics have included misstatements and efforts to intimidate. an able employee of the Federal Government. There is reason why the port authority is utilizing these tactics. The record that has been unfolded this last week is an amazing one. Among other things, there have been disclosed improprieties by high port authority officials, patronage payments and favoritism. There has been disclosed evidence of kickbacks to a port authority official by a realty firm. These facts and many more have been brought to light. It is of basic importance that the operations of the port authority shall serve the public interest. No longer may the public be allowed to remain in the dark concerning the operations of this public agency, which has thus far succeeded in enjoying practical immunity from any higher public authority. There is a clear danger that, unless the activities of the port authority are exposed constantly to public scrutiny and public criticism, an organization will have developed in American political life which is independent of the people and of their elected representatives. As the Chair has stated, the phase of the hearings which will conclude this afternoon, is only preliminary. The investigation by the subcommittee will continue and additional hearings will be held in the near future. The date of these hearings will be announced in due course. The press will be supplied with a copy of this statement shortly. Mr. Singman? Mr. SINGMAN. I would like to call back to the stand Messrs. Goldstein, Goldberg, Tobin, and Doyle. TESTIMONY OF SIDNEY GOLDSTEIN, AUSTIN J. TOBIN, JAMES J. DOYLE, AND DANIEL B. GOLDBERG-Resumed The CHAIRMAN. The committee will be in recess to allow the photographers to take their pictures. (Brief recess.) The CHAIRMAN. The committee will resume. Mr. Singman? Mr. SINGMAN. Mr. Tobin, in 1952, the port authority commenced a new phase of long-term financing with the issuance of the new consolidated bonds, isn't that so? Mr. TOBIN. That is correct. Mr. SINGMAN. In the consolidated bond resolution adopted by the port authority on October 8, 1952, didn't the port authority covenant with its consolidated bondholders that it would not issue new consolidated bonds at any time unless specified conditions were met with respect to the profitability of certain groups of facilities? Mr. TOBIN. Specified conditions as to earnings. I don't accept at all your word "profitability." Certain conditions as to the amount, the coverage of earnings, what we call the 1.3 coverage rule. Mr. SINGMAN. Well, in effect, then, didn't the port authority covenant not to issue any new consolidated bonds for a new facility, unless the net revenues of the new facility, or net revenues from all port authority facilities, including the new ones, would equal at least 1.3 times the applicable maximum debt service requirements? Mr. GOLDBERG. Could I help you on that, Mr. Singman? Mr. SINGMAN. Again, Mr. Goldberg, I realize I am oversimplifying, but I am trying to reduce it to language that is reasonably comprehensible. Mr. GOLDBERG. I will try to do the same, with some minor corrections of what you said. What you said is not wrong in substance, sir, but it was not quite accurate. We did covenant that we would not issue new consolidated bonds unless one of four conditions existed. One of them, I think, you were quite proper to ignore. It was a refunding situation, where you end up with the same amount of bonds you started with, and it didn't change the basic picture. The other three conditions, I think, were what Mr. Tobin was trying to generalize about in the 1.3 times earnings test. The idea was that since this was to be an open-end bond issue that is to say, we were able from time to time, with no dollar limit on the total amount we could put out, to issue new bonds, the bondholders needed some assurance that they were just not going to be flooded by an inundation of new bonds that couldn't produce earnings to cover the bonds. And so the basic ratio of 1.3 times was devised. |