CIA AIDED TWO FUNDS AFTER IRS TAX PROBES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73-00475R000101700001-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 23, 2016
• Document Release Date: March 12, 2014
• Sequence Number: 1
• Publication Date: February 25, 1967
• Content Type: OPEN SOURCE

STAT
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/03/12 : CIA-RDP73-00475R000101700001-8
14.
?
????"N,
,????????,,o
. /.:\ ri7dfm("P??
i
V10
?.1 C4
By ORR KELLY
Star Staff writer ? iiartke Says CIA Used Students in
Two foundations that served Do.v,inicon Re2ublic. Page A-2
as major channels for Central
intelligence Agency funds began
cooperating with the CIA shortly
after 'they had gotten into trou-
ble with the Internal Revenue
Service.
Together, the two served as
conduits for $1,375,750 between
and 1964.
The two are the J. M. Kaplan
Fund and the David, Josephine
land WU:field Bai:d Foundation?
of New York.
I According to records of the
(House subcommittee on iounda-
-? lions, headed by Rep. Wright
D-Tex., revocation of
the Kaplan ...Fund's tax-exempt
status was recommended by
district directors of IRS in ::ew
.York in 1057 and again in 1953.
However, the IRS investiga-
'tion was held up, according to
:testimony before the committee
by an IRS official; after the CIA
? ? . . ? .
, dresses or other ?? information
,! was given. It was while they
were questioning IRS officials
about their lack of ?? vigor in
! checking up on the Kaplan Fund
! that they learned of the CIA's
:involvement. . .
I At the same time, theircuri-
osity was aroused by the David,.
Josephine and ,Winfield Baird
Foundation, one, of a group of
foundations operated by David
G. Baird, a New York financier.
It was' not until after the
hearings had ended that Olsher
noticed that the .Baird Founda-
tion was getting money from
ono: of the'same CIA- source s.' -
?1 ? ?aira s tax returns contain a
I bewildering list of contributions.
;Some are as small as .50 cents
and hundreds of them are under
$5. But in each year they add up
Ito more than $1 'million. And in
1963, the total exceeded $3
;million: '
Buried in the rechrds for the
four years 1961 through 1964 is
$451,000 intIA money.? ?
1. The Baird Foundations' got
into trouble with the IRS in the
mid-1950s and in 1959 they were
informed that their tax exempt
status was geing to be revoked.
. But when the Patman:commit-
tee* held,, its?hearings , in 1964,
told the IRS it was working
through the Kaplan Fund.
When the IRS was first told
this was not made clear in the
committee's public hearing.'
The CIA funds first started 1
flowing through the fund in 1961.
Tax Records Cited :
But tax records obtained by
the committe show that the
Kaplan Fund chanc.N.le.d $923,950
to the Institute of International
Labor Research :Inc., in 1961,
1962 and 1963.
Between 1957 and 1962, attor-1
I i:eys for the fund had a series of
I meetings with the IRS. But
I there were no further meetings
' till 1964?when the Patman
committee hearings were held.
The Kaplan Fund still has its
tax-exempt status.
Raymond S. Rubinow, execu-
tive officer of the fund, said in a
telephone interview yesterday
that the fund's relationship with
the CIA and its tax troubles
were "entirely separate."
Curiosity Aroused
?
The link between CIA and the
Kaplan Fund was discovered
accidentally by Patman and
Harry A. Olsher, director of
foundation studies for the com-
mittee, during their study of tax
returns from nearly 600 founda-
tions.
They found that virtually all of
the contributions to the fund
were coming from eight mys-
terious funds for which no ad-
.
and
one of them was cooperating
with the CIA. ?
Although he did mit know then.
about the CIA link, Patman
questioned Mortimer M. Caplan,: ?
former commissioner of internal.:
revenue, about what appeared to.?
him to be a strange laxity in:
cracking down' on the Baird.;.
Foundations. ?
A tax assessment of $641,562:*.
against the Lansing Foundation.:
? one of the Baird group ? was:,
approved in January 1065: ?
Patman noted, but the found
tion was not billed until October..?
"As far as we can, tell from.)
the inspection report," Caplan:1_
replied, "this just was an hind-
vertent error. A file was placed '
Ion a shelf. And the actual mail-
ing of the bill did not go out until '
this later date."
Since then, the Baird founda-.?',
Lions have been ordered to turn .
over their ,assets to tax exempt ?
foundations and. they have been
billed for $6.2 million in back,:
,
taxes. They are now contesting .
the tax assessment in the
Tax Court.
Baird could not be reached for'
comment. on the relationship
between his tax troubles and hi.?
four-year .cooperation with the.
., . -% ? ?
Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/03/12 : CIA-RDP73-00475R000101700001-8