gated for criminal prosecution at that time, I cannot understand why the picture should change. Recently I was asked to waive the statute of limitations for the year 1958. I inquired whether this would be civil or criminal. I was given no understandable answer. Therefore, I refused to waive prosecution and none has been brought against me for the year 1958.

Of course, subsequent years are still open for any potential prosecution which has not yet materialized.

Sworn to and subscribed before me this 14th day of July 1965.

CLAIRE V. SMITH,

Notary Public, Pittsburgh, Allegheny County, Pa.

My commission expires June 16, 1969. Senator LONG. Thank you, Mr. Brunwasser. We appreciate your being here.

Our next witness is Mr. George Charlton, who we understand is a former employee of the Internal Revenue Service.

Do you solemnly swear that the testimony you are about to give before this committee will be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. CHARLTON. I do.

TESTIMONY OF GEORGE M. CHARLTON, JR., PITTSBURGH PA.

Mr. FENSTERWALD. Would you state your full name and present address for the reporter, please, sir?

Mr. CHARLTON. George M. Charlton, Jr., 1714 Lincoln Avenue, Pittsburgh.

Mr. FENSTERWALD. What is your present occupation?
Mr. CHARLTON. Field auditor.

Mr. FENSTERWALD. With whom?

Mr. CHARLTON. The Commonwealth of Pennsylvania.

Mr. FENSTERWALD. You are an employee of the State of Pennsylvania?

Mr. CHARLTON. Yes.

Mr. FENSTERWALD. Were you formerly an employee of the Internal Revenue Service?

Mr. CHARLTON. Yes, I was.

Mr. FENSTERWALD. For how long?

Mr. CHARLTON. I began with Internal Revenue when I came out of the Army, I went back with the Veterans' Administration from 1946 to 1948; I went with Internal Revenue in December 1948.

Mr. FENSTERWALD. How long did you stay with them?

Mr. CHARLTON. Until August of 1963, but I had accrued leave which took me to the end of the year.

Mr. FENSTERWALD. That was roughly 15 years?

Mr. CHARLTON. Yes.

Mr. FENSTERWALD. Were you a special agent?

Mr. CHARLTON. I was a special agent for 11 years.

Mr. FENSTERWALD. That is in the Intelligence Division?

Mr. CHARLTON. Yes.

Mr. FENSTERWALD. Was this in the Pittsburgh area?

Mr. CHARLTON. In the Pittsburgh area. I also performed undercover cases in other States.

Mr. FENSTERWALD. But most of this 15 years was in the Pittsburgh area?

Mr. CHARLTON. Yes.

Mr. FENSTERWALD. And did you resign or were you fired from Internal Revenue Service?

Mr. CHARLTON. To put it politely, as they say, I was removed. Mr. FENSTERWALD. You say you were removed in a polite sense? Mr. CHARLTON. Everything is done politely, in certain instances. Mr. FENSTERWALD. But this was not what you would call a voluntary removal?

Mr. CHARLTON. Not hardly. They knew they would not get a voluntary removal.

Mr. FENSTERWALD. So, in effect, you were fired?

Mr. CHARLTON. Definitely.

Mr. FENSTERWALD. When was that?

Mr. CHARLTON. It was in August of 1963.

Mr. FENSTERWALD. Could you tell the committee without my going to the length of asking you a lot of detailed questions about it what led up to your firing? Relate it just in narrative form. I think it would save the time of the committee.

Mr. CHARLTON. So many things happened and they happened so fast. I was not aware of just what this committee was investigating other than what I saw in the paper. But I jotted some notes down.

I have done undercover work in various States and I have received commendations, et cetera. In August of 1963, they brought in several city policemen and wanted us to work in conjunction with them and another so-called topnotch undercover agent also, to work with these policemen. I objected.

Mr. FENSTERWALD. On what grounds did you object?

Mr. CHARLTON. If the city of Pittsburgh wants the numbers cleaned up, they do not need the Internal Revenue Service.

Mr. FENSTERWALD. Would you say that the Internal Revenue Service is spending an inordinate amount of time, in your judgment, in this activity?

Mr. CHARLTON. They are spending a hell of a lot of time on it. Mr. FENSTERWALD. Could you tell us what, basically, led up to your removal from the Service?

Mr. CHARLTON. From what I know, or in certain instances, things happened that I do not know about. But from what I understand, I was doing this undercover work and I made a lot of raids, and also a lot of arrests and whatnot. I had planned on a vacation in August. That was the first vacation that I had planned in 20 years. Any other time, any of the agents that had a vacation period that they wanted, and my time was longer so I came first, I would relinquish my time to them. But this particular period I wanted, but the Chief stated, "No dough, no dice," I would perform this function.

I pointed out that I did not want to work with the city police. It was some sort of a-I forget the word some of the police officers later used, but it is something compelling you, almost, or putting you in shape I have had it in law. I just cannot think of the word. [Entrapment.]

Mr. FENSTERWALD. Are you a lawyer?

Mr. CHARLTON. No, sir.

Mr. FENSTERWALD. Well, did you comply with the order to cooperate with the local police on this occasion?

Mr. CHARLTON. Yes; I did.

Mr. FENSTERWALD. What happened then?

Mr. CHARLTON. One of the local racketeers was a personal stooge of one of the detectives there in the city who does not enjoy a reputable personality. Earlier that year, I had written a note to the Chief stating that several of the other undercover agents had overheard racket persons making promises of doing me bodily harm, framing me, or anything they could to get me out of their hair.

Mr. FENSTERWALD. You were not very popular?

Mr. CHARLTON. No: I did not win any popularity contest.

Mr. FENSTERWALD. What was this particular assignment they sent you on in 1963 ?

Mr. CHARLTON. Just to work the Pittsburgh area with the two policemen.

Mr. FENSTERWALD. What would your normal duties be on an occasion like that?

Mr. CHARLTON. Well, we had a list that had been given to us of suspected number establishments. Each day, we would go down the list at random and pick out places to visit or frequent.

Mr. FENSTERWALD. And you would do that and place bets?
Mr. CHARLTON. Yes.

Mr. FENSTERWALD. Was this your basic duty during that time?
Mr. CHARLTON. That was all.

Mr. FENSTERWALD. What was it in doing this that caused your differences with the Service?

Mr. CHARLTON. Usually, what happens when these number rackets come up, most of them are small. When they come up before the Federal bench, the first time, they are let off the hook. The second time, the judges promise to give them a jail term. In several instances, I have been in some places two times or even three, and that is what the racket fellows were worried about. They were worried about these jail terms.

Mr. FENSTERWALD. You say that these were not big members of the organized crime drive, but just small numbers rackets?

Mr. CHARLTON. That is correct.

Mr. FENSTERWALD. Was there some charge brought against you that led to your dismissal?

Mr. CHARLTON. Yes, two charges, and even the Government was at odds on the two charges.

Mr. FENSTERWALD. What were they?

Mr. CHARLTON. No. 1, failure to report an attempted bribe, and (2) failure to properly take care of governmental records.

Mr. FENSTERWALD. Has any action other than dismissal been brought against you?

Mr. CHARLTON. No, but I have gotten it through the grapevine that they were going to try and have me before the grand jury. They were calling in all the racketeers, trying to force them to say that they did business with me. In other words, the IRS was trying to scare me into not appealing my dismissal.

Mr. FENSTERWALD. I thought they had to do business with you because you were in the business, undercover business of placing bets with them.

Mr. CHARLTON. The attitude that they were using was that the fellows were paying off to me.

Mr. FENSTERWALD. So you, in effect, were fired from the Service. You now work for the State of Pennsylvania, but you do not know what your fate will be?

Mr. CHARLTON. I presently have a suit in the Federal courts against Mr. Bingler and Mr. Davis and the Civil Service Commission. Mr. FENSTERWALD. For reinstatement or damages?

Mr. CHARLTON. I do not recall whether the attorney put the damages into this thing, too, or not.

Mr. FENSTERWALD. Have you got any statement you would like to make to the committee about the operation of the Internal Revenue Service in the Pittsburgh area?

Mr. CHARLTON. Yes. I can say this on all fairness. And perhaps if I were still employed there, I might not be too willing to come to Washington, D.C., or anywhere else to testify against the Internal Revenue Service because my days would be numbered. However, I have voiced my opinions at various times, but I have never voiced them unless asked for. I have always stated that if someone wanted my opinion they would get it, and perhaps not the way in which they wanted it. I recall in one instance Mr. Davis called me to his office and he asked me, what advantage would there be to hire another Negro special agent. I told him there would be all the advantages in the world. No. 1, if he had had another Negro agent, I would not be subject to leaving my home the numerous times that I had to leave. And No. 2, a lot of times when you have these tax cases some of the individuals figure you are inferior. If you play dumb right along with them, you will be able to get more information than the average agent.

So a Negro agent was hired. I was out of town on an undercover assignment at the time, and something happened to him. When I got back, he was gone. I was the first Negro special agent in the United States with the Internal Revenue Service.

Mr. FENSTERWALD. Would you go back with the Internal Revenue Service if you were to win this suit?

Mr. CHARLTON. Not under Mr. Davis.

Mr. FENSTERWALD. Mr. Chairman, there are a number of other questions I could ask of Mr. Charlton, but because of his present legal situation, I think, unless he has some further statement of his own, I would prefer not to ask them as of this time.

Senator LONG. I believe that is all, Mr. Witness.

Mr. CHARLTON. Could I make one more statement?

Mr. CHARLTON. The IRS began investigating my income tax returns in August of 1963. Shortly thereafter-approximately 4 months-two of the agents, a special agent and a revenue agent, came and wanted me to sign a waiver giving them a longer length of time to conduct the investigation. I told them that they had been on that case longer than it had taken me to clean up several large cases while I was employed there, and that I would not sign it. That weekend I received a letter from the Commissioner turning down my appeal. In April of this year, I thought my tax businesses was all over. I received a letter from the IRS-as a matter of fact, I received three letters, registered or certified, giving me 90 days to file an appeal in

Tax Court, or pay the tax. They were taxing me on $3,900 in 1959 that my grandfather had given me. They did not give me a hearing here in Pittsburgh or anywhere, they just sent out the letter of assessment. The rest of the years-1960 to 1962, inclusive were cleared. But they were taxing me for the $3,900, stating that I had taken this money that my grandfather had given me to pay taxes on his house to use in my own behalf; I had confiscated the funds, in other words.

That appeared highly irregular to me. Because in our procedure, we always have a conference prior to sending a 90 day letter. You always give an individual a hearing when the agent arrives at his total tax figures. They give you, the taxpayer, a hearing, a time to come in and compare the notes. And at that time, if I had been given a hearing they would readily have seen where this was not taxable money. They (IRS) felt that I had been unemployed for such a long period of time that I would be unable to incur additional expense to get an attorney to file an appeal through Tax Court. Their plan (IRS) just seemed to be to harrass me all the time.

When I was working with the IRS, it amazed me that in one case when I wanted to go to Louisiana to interview this particular taxpayer they said it would cost too much money. Yet they sent an agent or agents out to Los Angeles, Calif., to interview my mother and dad, who are over 60 years of age, relative to what property I had, and what we owned together anything just to create an harassment. Also they badgered my ex-wife, and the girl who is my present wife. They went to my present wife's former neighborhood up and down the street and asked in no uncertain terms when I had been there and for how long I had stayed. And they went to my brother's house where I stayed when I was separated from my wife, and told the people next door they were investigating me and wanted to know how my brother spent money-anything to embarrass me.

Senator LONG. Did you say they sent agents all the way to Los Angeles rather than getting ahold of the Los Angeles office and making a check?

Mr. CHARLTON. Yes.

Senator LONG. And is that not wasting money?

Mr. CHARLTON. That is right. And they will not get anything and did not get anything, as the examination shows.

Senator LONG. Did you know a Lieutenant James?

Mr. CHARLTON. Detective Sergeant James.

Senator LONG. Did he have anything to do with your dismissal from the Internal Revenue Service?

Mr. CHARLTON. Yes, he did.

Senator LONG. Can you tell us what connection he had?

Mr. CHARLTON. I can read the letter to Attorney Teitelbaum, who was the former U.S. attorney who represented me at this hearing, wrote through the Chairman of the Civil Service Board, if I may take this time.

Senator LONG. You may proceed.

Mr. CHARLTON (reading):

There seems to be no question that Mr. Charlton has been a valuable career employee with the Internal Revenue Service for many years. For several years he has worked in an undercover capacity and has developed more wagering tax cases than any other agent in America unless it was his coworker, Mr. Larkin.

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