Investigations: Tauter & Tauter

The 1,500-mile lines between Pecos, Texas, and Washington, D.C., were getting tauter and tauter as the Billie Sol Estes scandal hotted up. Last week Assistant Secretary of Labor Jerry R. Holleman, 42, a Texas politician and former president of the state A.F.L.-C.I.O., resigned after admitting that he had accepted a $1,000 gift last January from Estes “to help ends meet.” Just two days before Holleman confirmed that he had asked Estes and other Texans to pick up the tab for a January dinner Labor Secretary Arthur Goldberg gave for Lyndon Johnson, but said he backed off when he learned that Goldberg’s policy was to pay for all such dinners himself. Goldberg promptly offered to produce canceled checks to prove he had paid for the dinner. Said Holleman of Billie Sol, in words reminiscent of a previous Democratic Administration: “I have not and I never will deny him as a friend.”

Other developments:

> The Department of Agriculture levied penalties of $554,162.71 against Estes for growing cotton on federal acreage allotments that had allegedly been obtained illegally. Since Estes is in receivership, the department plans to collect the penalties by deducting them from storage costs of Government grain still in Estes elevators. Agriculture Secretary Orville Freeman denied that Estes received any favors (Agriculture had been accused of giving Estes a break by asking a 2¢-per-bu. bond—the lowest possible rate required of grain-storage operators). Said Freeman: “The Government hasn’t lost a dime . . . Estes hasn’t got a cent of the taxpayers’ money.” Of three Agriculture officials accused of accepting gifts from Billie Sol, one has resigned, one has been fired, another has denied the charges under oath. The official who approved Billie Sol’s low bond has been shifted to another job.

> Texas Attorney General Will Wilson prepared to file an antitrust suit against Estes, alleging that Billie Sol used capital gained from the grain-storage program to help him corner the liquid-fertilizer market in West Texas. Ledger accounts obtained by Wilson indicated that Estes had withdrawn $40,000 in cash from his bank account before flying to Washington in January. Even more mysterious was an Estes ledger entry showing $235,000 paid out for a “Washington project.”

> William P. Mattox was suspended as vice chairman of the Reeves County Agricultural Stabilization and Conservation Committee—which helps set crop allotments in Estes’ home county—while the agency investigated his connection with Billie Sol. Mattox has admitted flying to Washington with Estes on a trip paid for by a group of Reeves County farmers to “clarify” cotton allotment problems.

In Washington to meet with Republican leaders, Dwight Eisenhower complained that Democrats, who were quick to begin congressional investigations during his Administration, were showing “no enthusiasm, no drive and no sense of priority” in poking into the Estes case. Texas’ Republican Senator John Tower said he had evidence that the Estes case “may make the Teapot Dome scandal look like a Sunday-school picnic.” At that point Kennedy came to the defense of Freeman. The President, said Acting Press Secretary Andrew Hatcher, has “the greatest confidence in Secretary Freeman, and that confidence remains unchanged.”

By week’s end the House Government Operations subcommittee was preparing to start an investigation concentrating on grain-storage activities. And the Senate investigations subcommittee was gathering material for open hearings on the whole Billie Sol Estes mess.