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Winona Republican-Herald, The (Newspaper) - August 19, 1949, Winona, Minnesota PLEASANT TONIGHT AND SATURDAY 'OLUME 49, NO. 156 WINONA, MINNESOTA, FRIDAY EVENING, AUGUST 19, 1949 FIVE CENTS PER COPY VELVET VOICE OF RADIO EIGHTEEN PAGES Bribery, Graft in County Board Bared by 4-Month Investigation Republican-Herald photo W. Kenneth Nissen, Winona county attorney, left, and Richard A. Golling, state public examiner, conferred in the county attor- ney's office Thursday regarding possible criminal action as the re- sult of the 36-page report on bribery for votes. Copies of the report went to the county attorney, County Auditor Richard Schoonover and Chairman Fred J. Roberton. The latter is mentioned in the report. Finland Strives To Crush Reds By TJsko Kauppala Finnish government moved swiftly today to smash a growing communist offensive as police nabbed red leaders in Kemi, scene of yesterday's strike violence which left one dead and nine injured. Imong thosT arrested was the chairman of the Kemi city council, mong os ar Lahja Heikkllae, vfho was described as one of the leaders of yesterday i. Nissen Studying Voluminous Golling Report No Resignations, Complaints Filed By Noon Today No complaints had been filed by noon today as a result of State Public Examiner Richard A. Goll- ing's report on bribery transactions in Winona county. Neither had there been any res- ignations by the four county com- missioners involved. County Attorney W. Kenneth Nis- sen said that complaints won't be prepared until the report has been "thoroughly examined." Said he: "The report of the state public examiner is a lengthy one of some 36 pages. I am studying it and the statutes and law regarding pos- sible criminal offenses. "No complaints will be preparedj i until it has been thoroughly exam- ined." Under state law a public official! convicted of asking, receiving or I agreeing to receive any bribe shall] be punished by a fine a jail] sentence. I But, in addition, he "shall forfeit! his office and shall be forever dis-j qualified from holding any public] office under the state." This is the longest report so far! in Golling's series on bribery. His! Meeker the longest up to this one. It consisted, of 20 pages. Previous Reports His previous reports on three counties resulted in resignations by all but one of the county commis- sioners involved, the state public examiner said here yesterday. If this Winona county report re- sults in resignations, it will be up strike call. Another city council member also was reported arrested. Reliable reports said communists from southern Finland also were arrested at Kemi. This would indi- cate that red agitators from Hel- sinki had been operating in the town, where striking lumber- jacks exchanged fire yesterday with police. Government spokesman has de- clared the strike offensive is de-j signed to make Finland into a com- munist state. Meanwhile, the strikers nounced a new strike meeting night, In defiance of a ban by theja governor of the northern provinceithree on all public gatherings, with heavy fines for any violations. A strike meeting also was in Helsinki today. Strikes May Continue Vaughan Aided Trip to Paris, Mundt Charges Mundt l.-S. D.) sought today to link trip to Paris in 1945 by agents of a Chicago perfume with the firm's gifts of home August H. Gensmer, Jr. Carl J. Goetzman firm with the firm's gifts of home ls- freezers to Major General Harryjsit aE called u. Vaughan "and his friends." i ie repor resus, Strikcs May Continue testimoney given the Senate invest-itions in one or all of the four Communist leaders have warned igrations committee secretly districts where com- _. rtrii-o aM.inns will con- riav. and made public arp riterl the board of that the tinuc. nuc> oegms 1.0 wi I appointments woi In Tyoekansan Sanomat, leading a motive of what is behind the following persons: npwsnaoer. infts of deeo freezers." j Spp.imrl district: Helsinki communist newspaper, gifts of deep freezers. Aimo Aaltonen, communist mem- ber of parliament said: Cl C'l purmuiiuiiv :saiu. "j "The working class should more Company which were sent to Mrs. firmly than before continue their Harry S. Truman, General Vaughan and four other adminis- tration officials during the summer ror fight for better wages." The communist press headlined their report of the Kemi clashes: "Workers' blood flows at Kemi." The stories spoke about police ter- >r. It has been estimated that some workers are out on strike. In some locals strike adherence is 100 per cent, but at most places anticommunlst workers are refus- ing to walk out. 'v Prime Minister Karl August Fag- erholin visited President Juho Pa- asikivi today at the latter's sum- mer residence at Kultaranta. Unto Varjonen, minister without of 1945 and the winter of 1945-46. ]ieis, Stockton mayor. Three representatives of the Ver- Third district: Ray Gatzlaff, Al- ley Company made the Paris tripjtura mayor; C. J. Nienow, Elba on an Army transport plane in j township chairman; Nick Siebenal- July, 1945, at a time, Mundt said.ier, Elba mayor; Leo Cisewski, Min- "When businessmen just City mayor; George Nepper, Gt LH6i C. V Cl V" w iJiw.JJ.jtJ Mundt is a member of the com- Arthur J. Kalmes, Norton township mittee which is looking into the chairman; Harry Whetstone, Roll- individuals who search out govern- ingstone township chairman; Ed- ment contracts for others at a fee. ward Rivers, Sr., Rolling-stone ma- ci __.___j. i f Gf rttQ usually five per cent. inquiry are Vaughan, Truman's military aide, and John! U11LO VUrJUilCU, JllllilOllCi W1W1WWV J portfolio, and head of a qablnet Maragon, Washington man-about- i____i _i____ rjAni urifK etiHlro frmm whn iispH fa have free access board ciiosen to deal with strike threats declared the government intends to "inflict a crushing de- feat on the communists." The plumbers began their strike today. Employers said the walkout was 100 per cent effective. Foresters Quit The strike announced by the For- estry Workers and Loggers Union also began today. It was not ex- pected to be complete, as workers in several locals voted against the walkout. Interior Minister Aarre Simonen said the clashes at Kemi were caused by a planned attempt to drive volunteer workers away from their jobs. He claimed violent com- munist agitation had been going on for weeks in Kemi. He declared the communists throughout Finland had started a throughout l-iniana naa sianeo a Saturday 80 fight against the Central Trade Un-" 'LQC ion Federation, and the govern ment and now had resorted to vio- lent measures. Simonen asserted the govern- ment feels sure the majority of the ment feels sure the majority of uhe nl ht 7.og. -sun rises tomorrow people stand behind it and the ad- ministration intends to preserve or- der. to a board of appointment to fill the vacancies. According to state law this board will consist "of the chairman the town board of each town, andj the mayor or president of each cityj or village, in the commissioner dis-j in which such vacancy oc- curs." This board of appointment shall meet at the auditor's office on three days' notice given by County Auditor Richard Schoonover. If a commissioner district is wholly within a city or none of Winona county's five dis- tricts' city council could fill the vacancy. If the board of appointment con- sists of an even number and there is a tie. the county attorney shall Mundt told reporters that the Board of Appointments If the report results, in resigna- are cited, the board of u.a.y, CVLJU. iuciui- j wtcti, cue uucii u. v- "begins to disclose a suspicion of j appointments would consist of the rt mntiifo nf XVTin t. VlPhlTlfi til6 i Second district: Mayor Cy Smith, by the Albert H. Verley Perfume utg oi aeep i second district: mayor uy omiui, He referred to freezers paid the first and second -a wards 0{ the city oi Winona; Ralph Davenport Winona township chair- man; Harry E. Tews, Hillsdale town- ship chairman; Anthony Rolllnger, Goodview mayor, and Vincent Dan- Corruption Report By State Examiner This is the complete report of Richard A. Golling, state public examiner, on his "special investigation of equipment transactions by the Winona county board of The last regular audit of the financial aSairs of Winona county was made by the department of public examiner in February, 1949, covering the years ended December 31, 1947, and 1948, and1 the period from January 1, 1949, to February 14, 1949. Since then information was brought to'light linking certain county commissioners to bribery transactions in the discharge of their public During the past four months all information and clues we're thoroughly investigated. The evidence uncovered, laid bare the existence of rampant graft and appalling corruption. It unfolded a story of collusion and the foibles.of grasping, venal men whose propensities for graft were apparently exceeded only by their own insatiability. The information and evidence so far obtained is presented here- with in the chronological order equipment was purchased or sold and the bribery transactions consummated. BRIBERY AND CORRUPTION During all of the times hereinafter mentioned, the board of county commissioners of Winona county was composed of the follow- ing members, except for one change in the third commissioner district: Name District get there." .nesota City mayor; George Nepper, iMt. Vemon township chairman; jyoi; Robert Currie, St. Charles ma- Two of the central figures in the I (Continucd on Page 3, Column 1.) iduirv are Vauehan, President WTCSEW NISSEN T. J. Pellowsfci C. J. Goetzman Frank J. Preston Fred J. Roberton W. K. Beach 1st 2nd 3rd 4th 5th town who used to have free access to the White House. The testimoney released by the committee yesterday, after Presi-, dent Truman had accused it of withholding testimony "favorable" to Vaughan while producing the un- favorable parts at public hearings, threw a new spotlight on the two men. Both Vaughan and Maragon are slated to appear before the com- mittee personally sometime after it resumes its hearings next Tues- day. WEATHER FEDERAL FORECAST Fair and pleasant weather tonight and Saturday. Low tonight 58; high LOCAL WEATHER Official observations for the 24 hours ending at 12 m. today: Maximum, 88; minimum, 60; noon, precipitation, 0; sun sets to- Additional weather on Page 13. Teofil J. Pellowski, above, is the only incumbent member of the county board of com- missioners who was not link- ed with corruption in the re- port made public today. August H. Gensmer, Jr., who, resides at Bethany, succeeded Frank J. Preston as a member of the board from the third district in 1949. EQUIPMENT PURCHASES Rotary Leveling Wing With Auxiliary Power Unit- Purchased in June, 1945 On or about May 7, 1945, the county board decided to purchase a rotary right-hand leveling wing with an auxiliary power unit. A call for bids for this road equipment was published the same month. The bids were scheduled to be opened June 5, 1945. The Flesch-Miller Company, a St. Paul concern, at the time was a dealer in heavy road equipment and sold Oshkosh trucks and Roto-Wing plows. A short time before the county board was sched- uled to open bids, Eugene E. Flesch, representing the Flesch-Miller Company, which company contemplated submitting a bid, agreed to give Frank J. Preston, William K. Beach and Fred J. Roberton for their votes in favor of his concern's bid. The county board proceedings of June 6, 1945, disclose that the bid of the Flesch-Miller Company in the sum of was ac- cepted. The Roto-Wing purchased was delivered a short time thereafter. The Flesch-Miller Company which now has an office in In- dianapolis, Ind., ceased doing business in Minnesota shortly before July l, 1945, and the Ken S. Gold Company, a Minnesota corpora- tion with offices at 2434 University avenue, St. Paul, took over as agents in Minnesota for Oshkosh trucks and Roto-Wing plows. Walter E. Duckett, Jr., who resides at 2610 West 41st street, Minneapolis, represented the Ken S. Gold Company.Jn the territory of Winona during the year 1945 and for some time thereafter.' In the early part of December, 1945, Duckett undertook a good will visit to Winona county to acquaint members of the county board withthe kind and quality of equipment his company had for sale. When Duckett informed Preston that the Ken S. Gold Company became the agent for the Roto-Wing snowplow, Preston confided that Eugene E. Flesch had some unfinished business with him and Commis- sioners Beach and Roberton. He had reference to the rotary wing purchased earlier in the year. Preston-informed Duckett that FTesch had promised to pay him Beach and Roberton, the. sum of for their votes in favor of the Flesch-Mffler Com- proposal. Preston complained because Flesch had left town Continued on Page 2, Column 1. REPORT BY GOLLING1 Frank Preston A Profile R. A. Golling Who is this man Richard A. Golling, state public examiner whose department has uncover- ed evidence of "appalling" bribery and corruption among members of the Winona county board and equipment firms and salesmen? Mr. Golling, one of the young- er state officers, is a native of St. Paul where he was born August 30, 1904. He is a graduate of St. Thom- as academy at St. Paul and the St. Paul College of taw. He was admitted to the bar in 1927 and practiced in St. Paul until his appointment as executive secretary, state commission of administration and finance in 1939. He then served as secretary of the new department of ad- ministration until July 31, 1939 when he became administrative assistant to the governor until July 31, 1940. At that time be was appointed secretary of the compensation insurance board. The position be now holds given him May 1, 1943. British Plane Crash Kills 27 Richard A. Golling, above, state public examiner, con- ducted a thorough four- months investigation which re- sulted in the findings contained in his report. Manchester, England (IP) A British European Airways plane en route here from Belfast crashed into a hill in thick weather today and killed 27 of. its 32 occupants. Four persons were killed in an- other crash at Baildon, near Shipley Yorkshire, the civil aviation minis- try announced. All occupants of the planes were believed to have been British. The big twin-engine transport, ar hour out of Belfast, approachec Manchester, in a thick mist. It ploughed into a mountainside, ex- ploded and burned. Police officers at the scene said they counted 22 passengers and four crew' members dead. Another pas- senger, a woman, died en route to the hospital in nearby Oldham About half the passengers were women. Two badly injured, were reported to be among the survivors. 4 Officials Named In Detailed Report State Public Examiner's Investigation Reveals 'Story of Collusion7 Involving Pay-offs by Equipment Salesmen, Firms By Adolph Bremer The state public examiner today linked four Winona county commissioners and. one former county commissioner with "bribery transactions." One ot these public officials alone admits having received In bribes, according to State Public Examiner Richard A. Golling. He declares in a special "Bribery and Cor- his four-month-long investigation has "unfolded a story of collusion and the foibles of grasping, venal men." He involves these five men "in transactions with equipment salesmen wherein they received or agreed to receive money from The former, third district commissioner, Prank Preston, 77, town of Mt. Vernon. His successor, August H: Gensmer, Jr., 47, Bethany, who assumed office only last January. F. J, Roberton, 71, Lewiston, now. chairman of the board and commissioner from the fourth district. W. K. Beach, 64, Dakota, fifth district commissioner. Carl J. Goetzman, 70, West Burns valley, second district com- missioner. All are farmers except Gensmer, who operates a general store. The only commissioner from the five-man board not mentioned in the 36-page recital of bribes for votes is the commissioner who lives in the city District Commissioner Teofll J. Pellowski. 'Appalling Corruption' In the sharply-worded report, Golling says of his evidence: (It) laid bare the existence of rampant graft and appalling corruption. It utjfolded a story of collusion and the foibles oJ' grasp- ing, venal men whose propensities for graft were apparently ex- ceeded only by their own insatiability." Many of the "corrupt" transactions, says Golling, were hatched in "notorious room" 14 at the Williams hotel here, but one was born in a Lewiston tavern and still others at commissioners' farms or store. Golling In his report also mentions seven salesmen and officials of four equipment firms, nearly all of them from the Twin Cities. It appears that the report is based almost entirely on statements by these equipment firm officials and salesmen, some of which are substantiated by the commissioners themselves. There are indications, too, that the investigations were started by the analysis of income tax returns by individuals and firms. No charge is made in the report that Gensmer has accepted money during his seven months in office, but the report charges that he was involved in two proposed transactions, one of which, was allegedly stopped when an equipment firm heard about. the progress of Golling's four-month-long investigation of the Winona county transactions. The proposed payment of (for three commissioners) in this transaction was stopped in June of this year. According to the report, Goetzman, Preston and Beach all have admitted accepting bribes. Goetzman is involved only once, in the amount of Golling reports on 14 separate transactions, and the three-way combination of Preston, Beach and Roberton or of Beach, Roberton and Gensmer appears in all -but three of those. Of the four accused of having actually accepted Roberton, Preston and Roberton denies, the report says, although both salesmen and bis fellow commissioners have involved him in statements made to Golling. The public examiner reports that the former commissioner, Preston on the board tfor 12 estimated he accepted about in bribes and that Commissioner Beach estimated he has re- ceived between and from 1933, when he joined the board, to date. Purchase of Snowplow Part However of the 14 transactions or proposed transactions covered by the report, the oldest occurred in connection with the purchase of a snowplow attachment in June, 1945. In that transaction, a representative of the Ken S. Gold Com- pany, Minneapolis, paid Preston which the former commis- sioner says he divided equally with Roberton and Beach, according to the report. "Preston says the report, "there were other bribes but he could not remember the names of the people who gave him money or the amounts." Examiner Golling, in the midst of a series of reports like this one on Winona county, told The Republican-Herald yesterday when he came to deliver copies of the report to officials: "This is the most significant report so far of corruption, from the standpoint of the number of commissioners, salesmen and com- pany officials involved, and from the standpoint of the ingenuity in the way in which it was accomplished." In the majority of the cases, the bribes were agreed to before the bid opening, permitting the assured contract winner to adjust its bid, the report indicates. Some of the highlights of Golling's report: 1 Winona county may have its own five-percenters. Gollmsr reports that prior to a bid opening for a tractor in May, 1947. Preston, Beach and Roberton conferred with Mark B. Pavey. Rochester, a sales representative of the William H. Ziegler Com- pany Inc., and agreed teat "the bribe figure should be about five per cent of the bid price." Ziegler's bid was higher than the low bidder, got the contract anyhow. The salesmen1 paid each although the five o'er cent amount wiu> 2 In July, 1947, the county got an offer of between and for a used grader. "Commissioner Roberton came up with covetous counter-proposal. He suggested that McMulIen reduce his offer to and pay to the three commissioners the difference between that figure and the amount of his offer." A bid was submitted and was paid off during the progress oi a card game at the Williams hotel. 3. In February, 1948, paid S480 for the three votes' in May 1947, after a joint conference with three com- to negotiate with each of the three com- missioners separately Through separate clandestine agree- ments" he got Preston's vote for Beach's for and Rob- erton's for 4. In August, 1948, before a bid opening for the purchase of two trucks Beach, Roberton and Preston agreed to purchase two used trucks, after the bid opening, from the George T. Ryan Company and also agreed to rent those two trucks in the mean- time. At the bid opening they bought the Ryan trucks, ap- proved a rental bill and later accepted (through Preston) a bribe, for a three-way split. 5. On the first day that Gensroer was seated as a county 4, told a salesman "he wanted to be paid" for his vote on a truck. Firms and their representatives involved In the 14 u-ansactions reported by Golling: !_ Eugene E Flesch, rcpresentinr TIesch-Miller Company, for- merly headquartering in Minneapolis, now, of Indianapolis, tod. Walter E Dnckett, Jr., Minneapolis; Ray McMuUcn, Min- neapolis; representing Ken S. Gold Company, St. Paul. (Continued on Page 3, Column 3.) i FOUR OFFICIALS ;