Mr. MOORE. On a lend-lease basis, you say? Mr. KUMMEL. I was just using a colloquial term. Mr. MOORE. Would you care to move the microphone just a little closer to yourself. Mr. KUMMEL. He was given a leave of absence. Mr. MOORE. What is that? Mr. KUMMEL. He was given a leave of absence to Mr. MOORE. Now, do these persons who are working on the political account also from time to time work on any commercial account? Mr. KUMMEL. Well, persons like myself, you might say. Mr. MOORE. Yes. Mr. KUMMEL. Only a few of the key employees I would say work on other accounts; that is quite correct. Mr. MOORE. Is that what is the reason for that? Is it just the pressure of work or are there policy reasons for diverting people to this account? Mr. KUMMEL. I would say, in answer to your question, that the majority, I would say, only with a few exceptions, work on this account and this account alone. There is a considerable amount of work to be done, and it is in a very short space of time. I don't believe that the people could work as effectively with other responsibilities. However, a person such as myself who is an owner of the agency naturally has to be concerned about general policy matters with all the accounts going on. Mr. MOORE. You gave some testimony a moment ago with respect to the method of making payments for obligations incurred on behalf of the political account. In connection with your commercial accounts, do you operate with the, shall we say, risk of your own credit on behalf of those commercial accounts and in accordance with your contract with them? Is credit, in other words, extended to the agency? Mr. KUMMEL. No, we do not. Theoretically in the advertising business you are always placed in funds by your clients before you ever make payment. Now, the only difference is this: With the networks they would probably bill us at the end of the month after the telecast but we would be paid by our clients before we would pay the network. The difference here is that before the telecast goes on we must pay the network. Have I made myself clear on that? Mr. MOORE. Yes. Senator GORE. You certainly do. [Laughter.] Senator CURTIS. We understand. Mr. KUMMEL. The networks have special rules for political broad casts. Mr. MOORE. Yes; we have received testimony along that line. They uniformly require payment 48 hours in advance. Mr. KUMMEL. That is right. Mr. MOORE. Now, is it not true that there may be situations where, and I think you have touched upon this in your prepared statement, where a commercial account of yours has a program which is preempted by your political client? Mr. KUMMEL. We do not have that. Mr. KUMMEL. That I know of. Mr. MOORE. It has not occurred? Mr. MOORE. So that you have not come to grips with the question as to what your policy should be in the event of such an eventuality with respect to the payment of your commission toward the preempted program? Mr. KUMMEL. I think that is up to the networks. They make the decisions when a preemption occurs. Mr. MOORE. Now, are your billing procedures the same in industrial accounts generally as in political accounts with the exception of the radio and TV area that you mentioned? Mr. KUMMEL. Could you be more specific about that? Mr. MOORE. Well, in connection with the commercial account you would bill on a monthly basis, would you not, for your own commission? Mr. KUMMEL. That is correct. Mr. MOORE. And that differs from the political account, does it, inasmuch as they put you in possession of funds in political activity? Mr. KUMMEL. That is correct. Mr. MOORE. At that time does the amount of funds given to you include your commission? Mr. KUMMEL. Yes, sir. Mr. MOORE. Do you have any policy with respect to TV as to whether in advising your political account you prefer live telecasts or film? Or has that come up? Mr. KUMMEL. I don't think that has come up. I mean the halfhour programs have all been live shows. There are natural limitations with the 5-minute programs because the candidates are traveling around and naturally it would have to be on film. Mr. MOORE. You render a technical service, do you not, in connection with the program of telecasts and broadcasts? Mr. KUMMEL. Technical services. Mr. MOORE. Do you in that connection concentrate your effort on any particular geographical section of the country? Mr. KUMMEL. No. I think that is a decision of the committees as to where. Mr. MOORE. It is not yours? Mr. KUMMEL. It is not our decision. In other words, we arrange for the telecasts, and they, the committee, decide who will be on the telecast and where it will emanate from. Mr. MOORE. Is it a correct statement that your function then is strictly a technical one? Mr. KUMMEL. Yes; I would say that is correct. Mr. MOORE. You don't participate in policymaking with respect to the campaign? Mr. KUMMEL. That is correct. Mr. MOORE. Do you have any idea men with respect to the campaign, gimmicks, tactics, or ideas? Mr. KUMMEL. Well, I believe the best way of putting that is that the committee itself decides on what the policy is. We do a certain amount of editing. We bring to bear the particular advice we have insofar as mass media is concerned, that is what they are employing us for. That is our main function and that is the one we perform. Mr. MOORE. Do you have anything to do with the arrangements for travel for the Democratic candidates, either by air or otherwise? Mr. KUMMEL. Not at all. Mr. MOORE. That is done by the respective committees; is that right? Mr. KUMMEL. I would imagine so. But it is certainly not one of our functions. Mr. MOORE. That is not your function. The function of what would you say in general is the function, or should be the function, of a public-relations or advertising firm? Mr. KUMMEL. To render Mr. MOORE. During a political campaign. Mr. KUMMEL. I would say to render technical assistance, and we naturally have knowledge of mass media and that is what we are employed for. Mr. MOORE. And you feel you are here to stay as an integral part of political campaigns? Mr. KUMMEL. I would say if they want us in this capacity, why we are very happy to be of service. Senator GORE. You are not running from business. Mr. KUMMEL. Beg pardon, sir? Senator GORE. You are not running away from business. Mr. KUMMEL. No, I wouldn't say we were, but we are very, very happy to be of service in this particular campaign. As I have stated, I am a Democrat and very, very happy to participate in the campaign and I know all the people in our firm that are working on this account feel exactly the same way. Mr. MOORE. Your agreement is a written agreement, is it not? Mr. KUMMEL. Yes, sir. Mr. MOORE. And you have supplied the committee staff with a copy of that agreement? Mr. KUMMEL. We have. Mr. MOORE. Do you have any other agreements with either of the other committees ? Mr. KUMMEL. None. Mr. MOORE. You do not. Do you at any time confer simultaneously with the top officials of any of the other committees as well as the Democratic National Committee? Mr. KUMMEL. When you say simultaneously do you mean do all of the committees meet at one time with us? Mr. MOORE. Yes. Mr. KUMMEL. No, this has not happened. Mr. MOORE. And with respect to your work, it is clear that with respect to your work for the other committees your commission there is the same, too? Mr. KUMMEL. That is quite correct. Mr. MOORE. Fifteen percent. Do you get into at all, do you have to concern yourself, do you feel in your representation of the political account with the $3 million limitation contained in the Hatch Act on campaign contributions and expenditures? Mr. KUMMEL. Well, since the commitments that we have are only for $1,300,000, I believe I have stated, the subject just hasn't come up. Mr. MOORE. I take it from what you say that you are aware of it, but it is not your particular problem? Mr. KUMMEL. That is correct. Mr. MOORE. Is that the way you feel? I have no further questions, Mr. Chairman. Senator GORE. You stated that you had placed accounts with the Democratic National Committee of $1,400,000, I believe you said; for radio and television? Mr. KUMMEL. That is right. In behalf of the Democratic National Committee $1,306,356. Senator GORE. Is that for a specific period? Does that accounts carry into the election period, up to November 6? do your Mr. KUMMEL. Up to November 6; that is correct. I believe the last telecast is the night before the election. Senator GORE. Are you now negotiating for further time? Mr. KUMMEL. I don't know whether-I don't believe we are. In other words, we have had this time for quite some time. It is possible, however, that any one of the committees might request additional time. Senator GORE. Thank you very much. Mr. KUMMEL. Thank you, Senator. Senator GORE. The committee will next hear Mr. Warren Olney III, Assistant Attorney General, Criminal Division, Department of Justice. Do you solemnly swear the testimony you will give the committee will be the truth, the whole truth, and nothing but the truth, so help you God? TESTIMONY OF WARREN OLNEY III, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION; ACCOMPANIED BY ARTHUR B. CALDWELL, CHIEF OF THE CIVIL RIGHTS SECTION, AND ST. JOHN BARRETT, ATTORNEY, DEPARTMENT OF JUSTICE Mr. OLNEY. I do. Mr. Chairman, I am accompanied by A. B. Caldwell, the Chief of the Civil Rights Section of the Department of Justice, and Mr. St. John Barrett, attorney. Senator GORE. Will they be participating in your testimony? Mr. OLNEY. I would like to have them sit beside me if I might. They will not be testifying, Senator, but I would like to-they have documents that I thought perhaps you might want me to refer to. Senator GORE. You may have them. You gentleman are welcome. Will you give your name and official position? Mr. OLNEY. Yes, sir. Senator GORE. For the record. Mr. OLNEY. My name is Warren Olney. I am Assistant Attorney General, in charge of the Criminal Division, and have been since February 1953. Mr. Chairman and members of the committee, I am here in response to the written invitation and request of the chairman of the subcom mittee. Senator GORE. Do you have copies of your statement? Mr. OLNEY. I do. Senator GORE. You may proceed. Mr. OLNEY. I am here in response to the written invitation and request from the chairman of the subcommittee stating that the subcommittee is conducting a study of political practices and campaign contributions and expenditures during the course of the 1956 presidential and senatorial campaigns, in the interest of public enlightenment and as an aid to the subcommittee's consideration of legislation which it hopes to recommend to the Senate early in the next session of Congress. The chairman's invitation has directed my attention particularly to the Federal Corrupt Practices Act of 1925, as amended, and requests as a matter of detail certain statistical information with respect to investigations and prosecutions under section 610 of title 18 of the United States Code, which section prohibits campaign contributions by national banks, corporations, and labor organizations. I shall deal with these specific requests first. In the spring of 1955 this subcommittee was considering S. 636, a bill to revise Federal election laws including the Corrupt Practices Act of 1925. At the invitation and request of the subcommittee I appeared on May 10, 1955, and testified on the subject. My testimony appears in the printed hearings for that date from pages 197 through 215. My views on the Federal Corrupt Practices Act, and particularly on section 610 of title 18 of the United States Code, were fully presented on that occasion. They have not altered. There is nothing that I care to add and therefore I will respectfully refer the subcommittee to my former testimony on this subject and will not waste the subcommitte's time in repetition. I will now turn to the statistical information which the chairman has requested me to provide for this occasion. The chairman has requested five specific items as follows: 1. The substance and number of cases investigated by the Department of Justice under section 610 of title 18, United States Code; 2. The substance and number of such cases submitted by the Department of Justice to the grand jury; 3. The substance and number of cases in which the grand jury refused to indict; 4. The substance and number of cases in which the grand jury found a true bill; 5. The substance and number of cases brought to trial and the outcome of the court action. With respect to the above the chairman also requested that we. state separately the cases against national banks, corporations organized by authority by any law of Congress, corporations in general, and labor organizations. A report has been prepared in compliance with this request. I am providing the clerk with copies. The report covers the years 1950 to 1956, inclusive, and is believed to be reasonably accurate. The possibility exists that 1 or 2 complaints for investigation, or even more, might have been omitted because of the fact that separate indexes or lists are not maintained in the Records Division of the Department of Justice according to the specific criminal statute which may have been violated. |