• U.S.

INVESTIGATIONS: Bernard Goldfine’s Two Faces

8 minute read

From two days of testimony before the House Special Subcommittee on Legislative Oversight last week emerged the two faces of Bernard Goldfine. The first face, carefully shaped by lawyers and flacks (see box next page), was that of a humble, eager-to-please immigrant who had come to wealth and awakened astonished one day to find his name “in the newspapers all over America because of gifts and hospitality to a friend of almost 20 years.” The second Goldfine told more about how he had become a millionaire in Massachusetts’ tough, no-quarter textile and real estate world; that face was angry, the voice hard, the attitude belligerent, the answers evasive. And at week’s end it was hard to say which Bernard Goldfine had most hurt his greatest friend, White House Staff Chief Sherman Adams.

The first Goldfine, groomed in a dark blue suit and “B.G.”-initialed blue silk tie, walked into the packed subcommittee hearing room chin up but eyes downcast, escorted by a retinue of three lawyers, devoted employees and jewelry-hung wife. When Subcommittee Chairman Oren Harris administered the oath, Goldfine helplessly mouthed words, cleared a frog from his throat and finally croaked: “I do.” Then he launched into the 25-page statement that the lawyers and pressagents had written, right down to grammatical errors, to fit his role of the common but honest man.

Beyond Paper Work. “I was born 67 years ago in a little town in Russia, Avanta, Russia, and I came to America when I was eight years old,” he began. “My business today is a family business, which makes good jobs for 1,200 people, including my two sons, Solomon and Horace, who are right here in this room.” Going on from there, with many a homely axiom and many a catch in the throat, Goldfine:

¶ Spoke proudly of his long friendship with Sherman Adams, who shared his faith in the industrial future of New England. On cue, during the reading he removed a gold wristwatch. passed it to the committee—”providing I get it back.” Said he: “The watch I am wearing now. on the back of it is written ‘to B.G.’—that means Bernard Goldfine—’from S.A.’—that’s Governor Sherman Adams—dated Jan. 20. 1953. and we all know that date. That is the inauguration date President Eisenhower was inaugurated.”

¶ Complained that “this whole miserable massacre of character” resulted from the vengeful attitude of John Fox, former publisher of the defunct Boston Post (TIME, July 7)—and all because Goldfine had demanded payment from Fox of a legal debt. Said Goldnne: “It’s not pleasant to have to talk about Mr. Fox because he seems like a sick man to me. He’s crazy like a fox.”

¶ Ducked responsibility for all the legalisms that had landed him in trouble with federal regulatory agencies: “Paper work has been out of my line.” A good deal of that responsibility he tossed into the lap of faithful, longtime Secretary Mildred Paperman, seated near by at the hearings: “After all, I am not a bookkeeper. She is.” (At one point, after Goldfine had repeatedly told the subcommittee that Miss Paperman could supply some of the answers it wanted, Miss Paperman indeed tried to pipe up with the answers. And Goldfine Lawyer Robert Robb distinctly admonished her: “Keep quiet, keep quiet, keep quiet.”)

¶ Blamed “politics” for his troubles with committee, public and press. “Frankly. I like to meet important people. Is that so bad? In the country where I was born, it took two or three generations for a ‘poor man’ to get to know important people . . . Nor did I ever realize that it was evil to be generous. Perhaps I do give gifts to too many people, but if I do, it is only an expression of my nature.” Another expression of Goldfine’s nature came later when he tried to beat the House subcommittee to the punch by admitting to reporters that his gifts, including hotel expenses of more than $2,000, a vicuña coat and an Oriental rug to Sherman Adams, had been listed as tax deductible by Goldfine companies—i.e., legally valid if some “ordinary and necessary” benefit or advantage flowed to Goldfine businesses from the expenditure.

¶ Admitted that Sherman Adams had arranged an appointment for him to talk over his woolen-mill difficulties with the chairman of the Federal Trade Commission, but denied that Adams had exercised any influence “with these giant federal agencies where a little man gets lost without some kind of guidance from a friend.”

¶ Recalled telling Adams in late 1955 or early 1956 that his real estate holding company, the East Boston Co., was “really being picked on” by the Securities and Exchange Commission, but denied that SEC pressure lessened as a result. Goldfine denied flatly and specifically that Sherman Adams had ever got him favorable treatment from Government agencies: “Mr. Chairman, I think you know Governor Adams is not that kind of man. And neither am I.”

Santa Claus. The subcommittee had other ideas. When Goldfine finally finished his laborious script-reading, the questions came furiously. Counsel Robert W. Lishman asked Goldfine if, as ordered, he had brought along the records pertaining to $776,879.16 in treasurer’s and cashier’s checks* purchased by various Goldfine-controlled companies since 1941—and still uncashed as of last May 7.

No, Goldfine had not brought the records. What was more, he would refuse to answer questions about them on grounds of irrelevance. Then Lishman tackled Bernard Goldfine head on: The checks were relevant, he said, because the subcommittee had “incontrovertible proof” that similar checks had been given to 30-plus Capitol Hill employees. Among recipients of the checks, ranging from $25 to $150: Laura Sherman and Helen Colle, both White House secretaries under Sherman Adams; Eugene Kinnally. the administrative assistant to House Democratic Leader John McCormack of Massachusetts (Kinnally later said that Goldfine had given him only a basket of fruit); and several past and present employees of New Hampshire Republican Senator Styles Bridges, a longtime Goldfine friend.

As Lishman handed Witness Goldfine the list of names, lawyers gathered around Goldfine like trainers around the star quarterback who has just broken his leg—and Goldfine soon came up with a fractured-sentence explanation: “At Christmas time these are all checks that we have sent at different times to some of the poor workers who work in different offices at Christmas time.” He added: “If that is something that is bad, I would like to be told about it.”

Right & Wrong. With Goldfine refusing to add information about the rest of the $760,000-plus. Counsel Lishman changed subjects. In his prepared statement, Goldfine had said flatly: “The first difficulty that any of my mills ever had with the Federal Trade Commission was in November 1953 . . . Neither I nor anyone else in our companies had had prior experience with the FTC in matters of this type.” Goldfine’s point, crucial to his case, was that when the FTC accused one of his companies in November 1953 of mislabeling its textiles, he was so bewildered that he went to Sherman Adams to find out what it was all about.

But Lishman’s questioning made it plain that Goldfine companies were old hands at mislabeling—and had so been charged. Goldfine companies had received FTC complaints in sheaves during the years 1942-1953—all about mislabeling their products, making them appear of higher quality than they were. Goldfine dismissed all these complaints as “minor matters” not likely to get to his level—and anyhow, not being much on paper work, he had known nothing about them. Finally, after further prodding, Bernard Goldfine began making a speech: “Mr. Lishman talked about cheating and everything else there . . . I think Mr. Lishman ought to confine himself to actual facts and not try to mislead people. It is not fair to me . . .” At that point Subcommittee Chairman Oren Harris, fed up with Bernard Goldfine in both his humble and insolent roles, broke in: “The chair will not put up with that continuously, now.”

The hearing then broke up for the holiday weekend, with Bernard Goldfine, scheduled to return this week, proclaiming: “I’m looking forward to my return very much.” So was the subcommittee.

* The name of a bank official, not of the person actually footing the bill, appears on both treasurer’s and cashier’s checks. As Lishman suggested, this “masks” the identity of the real payer. Moreover, such checks have no time limit on them, as opposed to ordinary checks, which are rarely honored after they get to be a year old. This, as Lishman also suggested, raised another possibility: that the checks had been given to public officials “who may have possibly been too bashful to come forward and get them cashed” but still may have used them as prime collateral in getting loans.

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