CIA SUBSIDIZES FOUNDATION AS 'SECRET CONDUIT'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00149R000600210049-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: November 17, 2016
• Document Release Date: June 10, 1999
• Sequence Number: 49
• Publication Date: September 1, 1964
• Content Type: NSPR

{, LJ'D4~ 0.64d'for Release 2000/08/27 :
'QUIREI't
603,439
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lc.te: :SEP 1 1934
4% Subsidizes
undation as
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secret Conduit
BY DANIEL RAPON)nT
VAS1-1INGTON, Aug. 31
(1t'I). -- Rep Wright Patman
drscloscd ,Monday that the Cell-.
tral Intelligence Agency had'
^i?,-en money to a private,
inundation which he said sere-~
ed as a ""secret conduit" fort.
1' agency.
The Texas Democrat quoted'
an unidentified CIA official as
the intelligence aency;
h:id an "arrangement" with the'
j).1. Kaplan Fund of New York,
C'idv from 1959 until sonic t.inic;
this year.
A 'D CONFIRMED
Ilir Internal Revenue Serv-'
Which is investigating thei
f nm _ax--tempt status.'
datioss_t
confirmed' tTiaf the CIA had'
:riven financial support to tlie'i
i-dcplan Fund. But and IItS'
ri nkesman said he knew of no'
urking arrangement between-
ihe two groups.
Patman did not elaborate one
i,lr, "etenient that the CIA had
ed the fund as a "secret con-:
It is known, however,-
ha the agency uses existing
ounclations, or occasionally cre
tcs its own, as vehicles for in-,
ring operations.
The congressman said he was
disclosing the CIA payments to
the fund because be felt lie had
oecn "trifled with'' in connec-
tion with the case- The CIA, fol-'
loving its tradition of secrecy,
:ad no comment.
a few persons in
in,gton.
A fund spokesman
York would make no
t ibut d money to charitable, He said he had asked his
~tE~r7a5~0449 ;6Qi021 049-ate specific
ticularly in the New York City
agency had given
months the
area.
Patnian's subcommittee has
been reviewing the tax-exempt
in New status of certain foundations
to see whether some of them
comment Iare taking advantage of it.
and indicated that none would
he forthcoming, lie would say
only that the fund's "philan-
thropic activities are quite well
known."
Mitchell Rogovin, assistant to
the Commissioner of Internal
Revenue, said that until Aug.
l0, the date of the last Patman
subcommittee hearing on the
subject, he was the only pres-
ent IRS employe who knew of
the CIA-Kaplan relationship.
Even the New York district
office of the IRS, which is con-
ducting the Kaplan investiga-
tion, was not aware of CIA's
tie-in, Rogovin said.
LONG UNDII SCRUTINY
Rogovin told Patman on Mon-
day he had informed the CIA
of the Revenue Service's in-
terest in the Kaplan Fund. But
he denied there was any ""ar-
rangement" among the CIA,
the IRS and the fund.
If the CIA official told Pat-
man otherwise, said Rogovin,
"it was a poor choice of words."
What seemed to bother Pat-
man, apparently, was whether
the CIA knew the Kaplan Fund
was under the scrutiny of the
IRS.
PROBER THWARTED
He explained Monday that he
lead not planned to make pub-
lic a matter touching on ""for-
eign affairs" but indicated he
The Revenue Service has was irked by his difficulty in
been examining the Kaplan getting all the information he
Fund for several years to de-(wanted about the case.
termine whether it should be'
permitted to retain its tax-,
exempt status. The fund has'
money to the foundation, and
which CIA individuals had se-
lected the fund.
The agency did not provide
the answers, Patman said. He
then decided that breaking a
confidence and making the is-
sue public was the only way he
could get meaningful informa-
tion, he added.
"I feel I have
with," he said.
(existed."
Patman
But Rogovin said he was "a
little concerned" about doing
so without the CIA's approval
or without CIA representatives
present.
`INTEREST' DISCLAIMED
Later in the day, Rogovin and
Acting IRS Commissioner Ber-
trand 11. Harding met privately
with Patman and CIA represen-
tatives. Afterwards, Patman
said he was convinced that "no
matter of interest to the sub-
committee relating to the CIA
that Kaplan had used the founda
tion to further his business em-
pire. He identified the financier
as former president of thel
Welch Grape Juice Co. and of,
Southwestern Sugar and Mo-~
lasses Co. i
The IRS does not discuss pup-i
licly any tax case it is investi-;
gating. But Patman asked the;
service to supply the addresses
and tax-exempt history of eight]
foundations he said had con
tributed a total of $923,950 toy,
the Kaplan Fund between 1961
and 1963. '
"The addresses of these
donors are not shown on the
fund's tax returns, despite the
fact that such information is
required by Treasury Regula-
tions,"' he. said.
The donors were listed as
the Gotham Foundation, the
Michigan Fund, the Andrew
Hamilton Fund, the Borden
Trust, the Price Fund, the.
Edsel Fund, the Beacon Fund
and the Kentfield Fund.
Harding said he would try to
produce the information for the*
subcommittee.
TAX AIDS JOLT'EI)
'atm an's disclose at a public
:caring of his House Small 13us-
r.r?s snbconimitlce was they
rre of sonic concern and eni
~,rr assnienl to Internal It",
officials attending as
%pparcntly, CIA's involve
He'll with the Kaplan Furl
a SeCApp` t6i/ PlAr Release 2000/08/27 CIA-RDP75-00149R000600210049-3