EXCERPT V Summary of profits and losses arising out of revaluation broken down by 5. Live animals (watch dogs). II. Current assets: 1. Raw materials and sup- 2. Trade goods purchased. 4. Long-term claims. 5. Prepayments effected. 7. Cash in hand and at pos- 8. Other banking deposits.. 10. Business amounts.. III. Claims for release of RM bank de- IV. Accrued liabilities.. I. Trust property goods.. II. Claims arising out of sales prior to the foundation of STEG and outside of STEG (so-called "old proceeds").. United Total plus programs, total DM DM EXCERPT V-CONTINUED Summary of profits and losses arising out of revaluation broken down by programs-Continued I. Nominal capital. II. Provisions for contingencies: 1. For claims for damages and eventual obligations for refunds. -30.976, 22 -218. 348, 62 +10. 471, 80 +1.090, +1. 149, 04 I. Trust obligations. II. Liabilities on account of claims out of sales prior to the foundation of STEG and outside STEG (so-called "old proceeds"). Authorization granted to reacquire from or through STEG materials and equipment required by EUCOM with appropriate adjustment US claim under Surplus Property Agreement. Desirable handle this manner instead of requisition procedure, to avoid possible dollar ingredient and occupation cost complications. Determination reached here that deposit to miscellaneous receipts not re quired. Request EUCOM excess property account be used to effect proper adjustment after reacquisition rather than OFLC Bulk Sale Account. Army forwarding parallel instructions to EUCOM. ACHESON BONN, GERMANY-EXHIBIT 5 [Excerpt Copy from the Minutes of the STEG Advisory Council and/or Committee Meeting Held on June 5, 1951] "In cases of third party claims, where title had passed, the Council concluded it was appropriate that these claims (claims arising from parties who had acquired stock from STEG and to whom title of such properties had passed but who were prevented from obtaining these stocks due to the freeze order), should be settled by direct negotiations between the third parties involved and the Department of the Army and that the committee should not enter into these negotiations or make any recommendations since they were outside the scope of the Council. "At this meeting, STEG requested guidance from the Council as to the policy they should adopt in its negotiation with Trucks and Spares since the major portion of the items reacquired by the army were under contract to Trucks and Spares although title to these items had not passed at the time of the freeze. It was agreed that these third party claims will be presented to STEG who would negotiate with each and present the claim to the committee with their recommendations and then finally be passed to Washington for settlement." BONN, GERMANY-EXHIBIT 6 REPORT OF INVESTIGATION OF THE HANDLING OF SURPLUS PROPERTY IN GERMANY INTRODUCTION During November 1951, Messrs. R. F. Cartwright and Lee G. Seymour, of the Office of Investigations of the General Accounting Office, accompanied the members and staff of the Subcommittee on Intergovernmental Relations, of the House Committee on Expenditures, on a European trip to investigate, among other things, the handling of surplus property in Germany by the STEG corporation, a German Government surplus property agency, which had received from the Office of Foreign Liquidition Commission large stocks of military surplus from the United States Government at the end of World War II. In addition to our continuing broad inquiry into the handling of this property and into the accuracy of the STEG money accounts with this Government, a number of special aspects of the situation are of interest. The following report covers personal interviews with various individuals who have been significantly mentioned during the hearings conducted by the Bonner subcommittee, such as George Dawson, the English surplus dealer; his attorney, Dr. Paul Hagenbach; and others. Dr. Paul Hagenbach Dr. Paul Hagenbach has been attorney and representative for George Dawson, the English dealer in surplus property, for some time, and his name has come up in various connections as associated with Dawson. On numerous occasions he has been described as being a partner in Dawson's many enterprises. Dr. Hagenbach was interviewed on November 26, 1951, in his offices at 32 Bahnhofstrasse, Zurich, Switzerland, by Congressmen Charles Brownson and Thomas Curtis, and by R. F. Cartwright, Assistant Chief of Investigations, General Accounting Office, acting as a subcommittee staff member. Dr. Hagenbach would volunteer no information and was most guarded in his answers to questions. Prior to the interview, Swiss espionage legislation was examined, and it was found that the law limits the possibilities of interviews, since merely asking questions about the business operations of a Swiss citizen can constitute a violation. Background data on Hagenbach is as follows: Paul Armin Hagenbach was born June 25, 1905, in Aarburg, Switzerland. His family moved to Berne, where he grew up and attended Berne University, from which he was graduated in law. Hagenbach was licensed as a lawyer in Zurich in 1932 and has practiced there since. He is generally regarded as a capable and reliable lawyer by his Zurich colleagues. His credit rating is favorable. Income tax reports, apparently for the year 1950, reflected an income of 28,800 francs (approximately $7,200). Similar reports indicate ownership of realty valued at approximately 80,000 francs ($20,000) in Kusnacht, Switzerland. Hagenbach is associated in the practice of law with Robert Blass, honorary Danish consul general; Hans Hurlimann, and Heinz Blass. All of the above have offices at 32 Bahnhofstrasse, Zurich, and have identical telephone listings there. There is some indication that Hagenbach's specialty, if he has one, is tax law. When interviewed, Hagenbach admitted that he represented a number of firms in which Dawson was interested, including Trucks and Spares, for the acquisition of surplus property in Germany and elsewhere. He would not furnish information as to the ownership of the various firms or participation of others in the firms. He indicated that his own capacity was as an attorney and that he did not have financial interest personally in the ventures. Hagenbach would not indicate that others were involved at all but, in response to a question as to whether there was American capital interested, he said, in a very guarded manner, "As far as I can see, there is not." At the time of the interview, Dawson's whereabouts in Europe were not specifically known, and Hagenbach agreed to attempt to get in touch with him at his home in Cannes, or at one of his other points of contact in France, and arrange for representatives of the committee to meet him while they were in Europe. Hagenbach did cooperate to this extent and furnished, through the American consulate in Switzerland, information to the effect that Dawson was living in the Ritz Hotel in Paris and would see representatives of the committee. George Dawson Dawson was interviewed on November 28, 1951, at the Crillon Hotel in Paris, by Messrs. Cartwright and Seymour, of the subcommittee staff. He voluntarily came to the hotel and agreed to answer any questions he could, consistent with time limitations, since he was leaving the same day for Cannes. Dawson said that he was the sole owner of the firm, Trucks and Spares, through the Continental Motor Trust, Liechtenstein, a corporation which he owns outright. He stated that Dr. Paul Hagenbach is his attorney and agent and has no financial interest in any of the companies through which Dawson presently operates or through which he has operated in the past. He stated that the Trucks and Spares outfit, which purchased large amounts of property from the STEG corporation, presently has an $8 million claim against the corporation in compensation for loss to his business, Trucks and Spares) by reason of the freeze orders which stopped the transfer of a large amount of STEG property to Trucks and Spares for resale. He informed that shortly after obtaining the contract with STEG in January 1950, he hired three employees of the STEG corporation: Rudy Bubenberger, Joseph Knobel, and Edgar Hess. Dawson stated that in addition to Trucks and Spares he owns and controls outright the Gefo Trust, of which Dr. Hagenbach is a trustee. This is a finance company to facilitate Dawson's other operations. Among various companies he has operated in the past, he said, are the London Oxford Steel Co., in which he was in partnership with one James Massie, since deceased, through which he purchased British surplus; Ernest Reed Co., in which he was in partnership with Christopher Allingham, through which he purchased British surplus; James and Partners, in which he was associated with Roy Payne, since deceased, through which he purchased Norwegian surplus; Transamerica Traders, through which he attempted to purchase American surplus without a great deal of success. Transamerica Traders was represented in the United States by George Chadwick, a Washington attorney, who has continued to represent Dawson's interest in a suit against John Maragon for the recovery of $8,000. The suit was based on a transaction in which Maragon was supposed to have received 1,700,000 francs in 5,000-franc notes from Dawson, in Paris in January 1948, for the purpose of cashing them at the bank. On the date this transfer of francs was supposed to have occurred, the French Government called in all 5,000-franc notes in an effort to counteract black-market operations. According to Dawson, Transamerica Traders was afterward sold to American interests, and he has no present connection with the company. Regarding the suit against Maragon, Dawson indicated a somewhat sublime disinterest in the matter, stating he would not have pressed the matter except for Chadwick's insistence that he carry through with it. Chadwick persuaded Dawson that if he did not continue the suit Maragon would take measures to give Dawson trouble. Dawson also stated that he had operated the firm of Monroe Trackett, at 27 Park Lane, London, in concert with one George Monkland, of Lloyd's of London. He stated that the French Government owes this firm 300 million francs. Dawson said he also owned and operated the Channel Islands Iron & Steel Co. on the Island of Jersey, and that this firm had dealt in American surplus goods and presently had a claim against STEG for a substantial amount of money. Information furnished by Mike Stern, free-lance writer Mike Stern, a free-lance writer for True magazine, who had previously had contact with the subcommittee in the United States, met Messrs. Cartwright and Seymour in Rome. He evidenced great interest in the surplus property subject, particularly in its Dawson aspects, and indicated that he had written an exposé for True magazine. He said that his story of the Dawson surplus operations would be published in the January 1952 issue of True. Stern stated that some months before, he had visited Dawson at his home in Cannes, France, and had spent a full day with him; that Dawson had furnished complete information about his activities and, among other things, had informed him that he, Dawson, had paid off four different individuals in the American Army and in the STEG corporation to effect his contract with STEG. He Dawson was questioned about this matter, and he stated that Stern had visited him in Cannes but that he had spent only an hour there, at lunch. denied furnishing any such information to Stern, and specifically denied paying off anyone in the Army or STEG or anywhere else in connection with his contract for American surplus goods. Dawson spoke in somewhat derogatory terms of Stern, and voluntarily offered to furnish a signed statement denying the allegation that he had paid off anyone. Dawson did furnish the statement, in his own handwriting, a copy of which is attached hereto as an exhibit. The original is available in the files of the General Accounting Office, if the committee desires it. The text of the statement is as follows: "NOVEMBER 28, 1951. "I, George Dawson, Villa La Saujette, Cannes, make this my affidavit and swear as follows: Never at any time did I pay any fee, gifts, or gratuities to any official or employee of the STEG Corp., or of the United States Army, or any other office of the United States Government in connection with the purchase by me of surplus property of America or any other surplus property. "G. DAWSON." The following background information concerning Dawson was obtained: George John Dawson was born in London, England, April 9, 1909, and is a British subject. As of November 14, 1950, he resided at Villa La Saujette, Avenue |