Justice v. Justice

A distinguished St. Louis federal judge last week told in detail how the Department of Justice reached out from Washington to interfere with a federal grand jury's investigation into tax-fraud cases. The investigation ultimately led to 31 indictments, including one against Harry Truman's old friend, James P. Finnegan of St. Louis, U.S. Collector of Internal Revenue (TIME, Oct. 22). Finnegan was convicted of misconduct in office, fined $10,000 and sentenced to two years.

"Early in 1951," said Federal Judge George H. Moore in a deposition to the Chelf judiciary subcommittee, "I was becoming increasingly disturbed about the handling of tax cases. I discussed the matter with Mr. Drake Watson, then the United States attorney ... I called Attorney General J. Howard McGrath on the long-distance telephone and . . . told him that in my opinion there was pressing need for a thorough investigation of the Internal Revenue Collector's office and of the failure to prosecute tax evaders."

Clogged Channels. McGrath, said the judge, urged that the cases be processed through "regular channels." Retorted Judge Moore: "What is to be done when the channels are clogged or blocked?" McGrath promised to think it over. When Moore heard nothing further from McGrath, he called his grand jury anyway. Hurriedly, the Justice Department gave its permission for U.S. Attorney Watson to help out.

"Within a few days," the judge related, "the jury returned seven indictments for criminal tax fraud." Then, to his consternation, the jury stopped dead in its tracks and issued an almost unprecedented "partial report," which stated that it had been unable to find any signs that "influence lawyers" had successfully quashed tax-fraud cases. Judge Moore indignantly rejected the report and put the grand jury back to work. Then he tried to find out who had been responsible for the whitewash report. In last week's deposition he pointed his judicial finger directly at Ellis Slack, 51, then an attorney in Justice's Tax Division. (Slack became acting chief of the division after Minkman Theron Lamar Caudle was fired.)

Telephone Approval. Ellis Slack, ashen and restless, sat listening in the congressional committee room while Committee Counsel Robert Collier read from Judge Moore's deposition. One day last October, said the judge, he bumped into U.S. Attorney Watson, "who was then showing unmistakable signs of ill health, which resulted in his death two months later." Watson was anxious to tell him that Ellis Slack, on one of his visits to St. Louis, had ordered the "whitewash" grand jury report. Watson's story: the report was written in Watson's office and, before the grand jury presented it to Judge Moore, was read over the telephone to Slack in Washington for his approval.

Before Judge Moore's deposition was read, Slack had denied to the committee that he had had anything to do with the report. After the judge's testimony was read, he repeated the denial. Slack's story was that his boss, Deputy Attorney General Peyton Ford, had sent him out to St. Louis to take "a look around" at the tax scandals. He could remember few details of what he actually did.

Said Chairman Chelf: "It appears to me that there was a definite attempt either to flag down, delay, sidetrack, derail or entirely wreck this grand-jury investigation." The committee voted to call in ex-Attorney General McGrath for a fuller explanation.

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