Arxtts Obstrurr We See It
Total Page:16
File Type:pdf, Size:1020Kb
We will serve so The one great rule group or party but of composition is to will hew hard to the truth as we find speak the truth'. it and the right as —Thorea, arxtts Obstrurr we see it. - An Independent Liberal Weekly Newspaper vol. 47 TEXAS, DECEMBER 28, 1955 10c per copy No. 34 Dallas Solon's Firm Paid $30,000 Irwin Charges 'Persecution' Of His Company Insurance Speculator Paid Back Fee Lately; Cain Says 'Knows' Officials DALLAS JoeWin, is fighting to save his American Atlas. He is fighting scared, and he is fighting hard. For three hours - last week in his company offices here, he spelled out to the Ob- server a story of his own financial' outwitting- and of his relationship with the Texas Insurance Commis- sion. He said he paid the law firm of which State Representative Douglas Insurance Commission officials in "born in sin." Commissioners found —Staff Photos Bergman is an active member a total company . insolvent June 24 but of about $30,000 in fees this year. district courtroom last week in Aus- tin heard a day's testimony cli- took no action to close it down. Left Smith, chairman of the commission; He said that thirteen or fourteen to right, Mark Wentz, commis- J. Byron Saunders, commissioner. thousand of this was "a back fee" maxed when Judge Charles Betts called U.S. Trust & Guaranty Co. sioner ; Joe Moore, head, securities The commissioners were appointed paid to Bergman's firm to help get division of the commission; Garland of Gov. Shivers. three of his minor companies "quietly "most amazing," "fraudulent," and buried by the Insurance Commission" to protect-his stockholders in Ameri- can Atlas Corporation. Last week the commission, now un- Omission From U. S. Trust Record der heavy public criticism because of the U.S. Trust & Guaranty debacle, Commissioners, Shepperd Did Not Tell Reporters of July Audit and Voting Trust Plan told Irwin that he - Must show cause on AUSTIN AND DAIIAS the commissioners said the July delay ported earlier that U.S. Trust was in- January 5 why two of his companies, solvent and had falsified records ; in-' Dallas. Fire and Casualty and Amen- A very, very strange oversight or was to obtain appraisals of U.S. Trust real estate. They said that Shepperd stead, they heard a last-minute pro- can Atlas Life Insurance, should not 'deliberate omission has left unre- posal from a Dallas accountant that he be-Claised down. "I paid my money and marked one chapter in the history of told them they did not have enough evidence of the insolvency to bring audit the- company . and that a new didn't get nothing, didn't I ?," Irwin the U.S. Trust & Guaranty collapse. management group then put up more asked. suit. The delay was by "mutual agree- The Texas Observer has learned ment," Chairman Garland Smith said. capital in exchange for a voting trust "If I went down there to Austin - that last July, when . the Texas in- agreement with owner A. B. Shoe- and got. down on my knees ,and belly surance commissioners delayed dos, Shepperd last week told the Ob- make of Waco. and kisged the' ring I might get ing the company they had found in:- server that his office made "no recom- not some consideration," he said. mendation" to:the commissioners in The real estate appraisals were The commission had closed another solvent, they approved a second pri- July. Asked if the burden of the'com- ordered by the commissioners until Irwin company, -Home Service Cas- vate audit by a new management pany's presentation in July of what he September 15, after the private audit ualty, several weeks ago with the group: Forsome reason, the com- described as "new material" was that had been completed and the new group charge that Irwin is not worthy of missioners . and Attorney General it was solvent, he repli.ed; "Yes." Was had decided to withdraw from the John Ben Shepperd all had failed to situation they had hoped to salvage. the public confidence. A show cause his office a party to the July decisio in order was also entered against All mention this.extraordinary agree- to delay the insolvency action, he was •Senator George Parkhouse said Dallas that he understood that -the new American Home Lloyds, a company asked. 'No," he said. • ment. to a • single reporter, even group was to include Benjack Cage, Irwin partially owned, ten days ago. though they had been questioned Real estate appraisals were riot pro- Irwin said he.gave the Dallas firm chief figure in the Insurance Company again and again on why they waited posed by the insurance commissioners of_ Texas. The audit ,was conducted by of Trion, Cain, Bergman, and Cocke five months before joining in the in- or the state at the July 5th hearing. "leg's...than $14;000 to get 'em to hush Felix Einsohn, a Dallas accountant solvency action on December 15. The commissioners did not even call who keeps the books for Lone Star up the closing of these three compan- on their own auditor, who had re- Ein ies" so that his American Atlas Cor- -In a conference with the Observer, •-Boat Conipany, an ICI' affiliate. poration would not be damaged by sohn told the Observer in Dallas that . the publicity. Cage was not associated with him in "Bergman called me the other day the audit. In the course of the July 5th hear- a fter Home Lloyds closed," Irwin -said. "I said to him, didn't get much . GILES TRIALS OVER ing, Insurance Commissioner J. Byron Saunders told Shoemake and-Einsohn for my money, did I ?' He said 'Well . AUSTIN The Observer has learned this that unless they had a considerable I didn't know you had those taxi -Bascom Giles will not again go notes'." position to sum of new cash, "a run on the de- to the witness chair on any vet- from a source. in a posits" of U.S. Trust might occur and The state alleges. in its suit against erans' land charges, the Observer know. • All American Home Lloyds . that Ir- "your whole house of cards falls," has strong reason to believe, and Last week the Observer re- U.S. Trust was organized as an in- win got some Dallas taxicab drivers to it is very likely that the effective sign some financial notes with which ported that, apparently there is a surance company but accepted depos- one six-year term he has been as- deal between Giles and the state its totaling $5,800,000 from deposi- he obtained a credit in the company. for agreeing to take $74,- Irwin said Bergman told him a week sessed - to hold Giles's: prison sentences tors, just as a bank does. State audi- 000 in bribes and being an ac- down to six 'years net by making tors called the -company's financial before the state's action against the company that it would go under if he complice to the theft of $6,800 them concurrent. condition and doubtful legal origin to from the state rill not be length- The basic premise of the state's the attention of the Insurance Com- didn't put it in voluntary bankruptcy. ened by prosecution of pending Irwin said American Atlas Corpor- counsel—led by Atty. Gen. John mission in June, 1954. The Commis- ation, a holding company which owns charges. Ben Shepperd—is that if the of- sioners agreed to permit Shoemake to Nine charges against Giles wait fenders will pay back the money hire a privateaccountant, and he made Atlas .Life Insurance Company, has hearing • in Travis County. Dis 7. lost between $1, and $2 million in as- the state lost, the state will miti- a report to them. Senator Warren Mc- trict A t t o r n e y Les Procter gate its criminal prosecutions. • Donald of Tyler complained to the 'sets because of what he calls "this brought Giles to trial on a charge persecution" and "false accusation." Commission again in January, and an of being an accomplice to theft in Last week Shepperd's office audit by Commission examiners was He insists that American Atlas Insur- land deal. He was found guilty, filed suit for recovery of $549,- ance, which has more than a dozen a undertaken February 28. As a result and although Procter asked for a 000, mostly from land' deal pro- of the audit, the commissioners—on branch offices in Texas, is financially -jury gave moters in Zavala County -r- Joe sound. The Commission's action a- ten-year penalty, the June 24th, 1955—entered an unpub- Giles three. Byrd, J. Paul Little, H. R. Stall- licized. show cause order listing "spe- gainst it and U. S. Life Insurance expected to press ing, B. H. Holsomback. This U. Procter is not cific findings" that the company was Company of Waco, a subsidiary of .es; that is, he brings the total recovery sought and S. Trust and Guaranty, could lead the other nine charo insolvent, had falsified its records will accept Giles's pleab in some of by the' state . in the land cases to misrepresented its assets, and should to the first revocations of life insur- them, and others may be dropped $3,400,000. To date $350,000 has ,(Continued on Page 4): (Continued on Page 4) for various reasons. been recovered. Let those flatter who fear, it is not an American art. -1-JEFFERSON 'Mustn't Tell the Passengers--They Might Lose Faith in the Ship' Superviied .7feecing - Information the Observer has Texas has.