FUND CALLED CIA 'CONDUIT'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00149R000700040038-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 20, 2016
• Document Release Date: February 26, 2007
• Sequence Number: 38
• Publication Date: September 1, 1964
• Content Type: NSPR

nel through, which the Central
Intelligence Agency dispensed se-
cret funds-a private New York-
based foundation-was disclosed
at a congressional hearing today.
Representative Wright Patman
(D., Texas); chairman of a House
small business -subcommittee
Approved For Release 200t6 1 . -I4U
FUND: CALLED'
','
1'. CIA `CONDUIT'
Patman Says House Unit
Studies Kaplan foundation
!said the CIA told him it made
such use of the J.' M. Kaplan
+' Fund..
Officials of the Internal Reve-
nue Service, which is auditing
the-fund to. determine whether it
should keep its tax exemption,
reluctantly confirmed the CIA
connection. CIA declined. com-
ment.
Asks Of Other Contributors
Patman -told the revenue offi-
eials'to provide information about
the addresses, officers and organ-
which, he said, together contrib-
uted almost $1,000,000 to the Kap-
lan Fund in 1961-1963.
When Acting Commissioner Ber-
trand M. Harding said IRS might
not have the information in its
files, another subcommittee mem=
her sharply disagreed.
"If. these are dummy corpora-
tions. or corporations we don't
want to talk about, come in and
say so-but don't say you don't
know anything about it,,, Repro-
sentative James Roosevelt, (D.,
FOIAB3B
fice twice in the past recom- ducting the audit has never been
mended that the Kaplan founda-
tiofi's tax exemption be revoked,
but the national office of IRS
overruled this recommendation.
Another audit by the district of-
fice now is in progress.
Patman indicated today that on
August 10 Mitchell Rogovin, as-
sistantto the commissioner and
the IRS contact man with CIA,
told. him privately of CIA's con-
nection with the Kaplan Fund.
"Used As Conduit"
Subsequently, Patman,l said a
CIA official: called on him and
told him "the J. M. Kaplan Fund
has been used as a conduit," but
he said he- did not know the de-
tails.
Patman complained the CIA
had not complied fully with his
request to provide privately addi.
tional information-"I feel 'like
this committee has been trifled
with . . : it looked to me as
though this information was put
told of the CIA connection
As Patman attempted to dig
deeper into the. reported CIA-Kap-,
Ian Fund arrangement, Harding
and Rogovin repeatedly advised
him to question the CIA. The
chairman finally agreed to, al
closed-door meeting later with
revenue and CIA officials. '
CIA Appropriations Hidden
The CIA operated so'secretly
that its appropriations are hidden
in the budgets for other, agencies
and are, known only to a handful
of members of Congress. -1
The other foundations, Patman
inquired ahoutr and the amounts;
he said they had contributed to':T
the Kaplan Fund; are: - i
Gotham Foundation,. $83,000'?
,Michigan' Fund, $63,000; Andrew..'
Hamilton Fund, $62,950; Borden?.
Trust, $140,000; the. Price Fund,
$185,000; the Edsel Fund, $130,-:
out with the purpose of stopping;
u; cue the I entf;Be p'und nd, $130,000;
committee investigation." } + $ 0,000,
In reply to questions, Harding
and Rogovin said IRS had not
been consulted when the CIA
made its arrangements with the
Kaplan Fund, was not a party to
any such arrangements, 'and
would not be influenced. by them
in deciding whether the Kaplan
tax exemption should be con-
tinued. , .
Rogovin said a CIA representa=
tive came to him in 'late 1961,,
after, the secret agency bad;
learned of the IRS audit, and told,
him "they had 'been using , the,
fund and they just wanted to alerb
the ' Washington office ... they
were concerned whether their terest would be made public, and,'
whether the fund would 'be' jeop?
;
0600"011 ulein.
ardized by the audit."', '
Ithe subcommittee members meti The New York district tax of-I He said the district office n
Y41.), told Harding.
Several hours after "the hearing
SEP 1 1,964
with CIA and IRS officials behind
closed' doors and, then, told news-
men the subcommittee' would not
pursue the CIA aspects . of the
Kaplan Fund matter.
Patman 'said in , a 'statement,
"The discussion i convinced the
committee that no matter of in-
terest~to the subcommittee relat-
ing to the CIA existed."
Ile also said Harding assured
the subcommittee ' the investiga-
tion of the fund "is being vigorous-
ly pursued and a full report will
be made to the committee,"
. "Does Not Belong In"
Expanding on his statement,
Patman said nothing had been
brought out that contradicted the
testimony at the hearing, but that
the subcommittee was convinced
"the CIA does not belong in this
foundation investigation." ,
There was 'no more specific
testimony about the amount of
CIA money, nor 'about Its dept
nation.,
The. subcommittee has been in-
vestigating the tax-exempt, status
enjoyed by some 15,000'cliaritable
foundations.
Caine Into Sludy Augusf 10
The Kaplan foundation
set up
,
by a former president of grape
juice and sugar companies, came
in for study August 10.
Patman said Kaplan had
"waged a number of 'battles" to
take over companies, and "in
some of these contests, lie has
made use of charitable funds set
up and dominated by him."
In New York, the Kaplan Fund
declined to give any information
on its background and also de-
clined comment on the testimony.
The subcommittee is looking
into reports of 'borrowings and
other business 'transactions be?
tween foundations and the 'fndi-