In New England, Pols, Dummies & Deals

HIS friendship with Bernard Goldfine, testified Staff Chief Sherman Adams before the House Special Subcommittee on Legislative Oversight last month, was "not a casual one nor one of recent origin." It was because he knew Goldfine so well that Adams was willing to vouch for him as "an upright and honest citizen, trustworthy and reliable." Whether Goldfine actually fits that description, whether he is the sort of businessman from whom public officials can accept gifts without having to return favors, remains the central issue in the Adams-Goldfine case despite distracting Goldfine pressagentry. Last week TIME reporters, conducting dozens of interviews and digging through musty court records throughout New England, reported on some of Goldfine's many visible business operations.

From their reports, Bernard Goldfine is far from the openhanded savior of New England industry that he professes to be. Instead, the picture that emerges is that of a man with:

1) a marked talent for easing in and out of companies through dummy organizations and straw men,

2) a phenomenal record of litigation behind him, including at least 89 lawsuits in the Boston area alone,*

3) a habitual disregard for federal and state regulations designed to protect investors and buyers of textiles, including regulations calling for company financial reports, and

4) a fast-running stable of big and little politicians who are indebted to him--and who rarely fail to come to his aid when he needs help.

Specific Goldfine case histories:

Northfield Mills. This mill, with 170 to 200 employees, in Northfield, Vt. (pop. 2,262), is owned by Goldfine but bossed by long distance by Goldfine Secretary Mildred Paperman. In November 1950 the Vermont secretary of state dissolved Northfield's charter because the company had refused to file an annual report. Northfield was reincorporated in 1952.

On June 25, 1952, Northfield received a letter from the Federal Trade Commission charging the company with mislabeling its products. A similar letter came on Dec. 12, 1952, still another on June 10, 1953. Goldfine testified before the House subcommittee that he thought Northfield had settled the FTC complaint then "with the correction of our labeling practices." But Goldfine's son, H. Maxwell Goldfine, talking to a TIME correspondent a few weeks before his father's testimony, had another version of how the hoped-for settlement was sought. He blamed Einiger Mills, Inc., a Goldfine competitor, for prompting FTC complaints. A lawyer named Lester Lazarus, continued "Mack" Goldfine, had done some of the work for Einiger. The Goldfines solved this problem by hiring Lazarus for the Goldfine legal team. The lawyer then went to work on settling the FTC complaint. Lazarus, said young Goldfine, made several trips to Washington, where he entertained FTC people "at least a couple of times a week." Concluded Mack Goldfine: "You can't see people a couple of times a week and wine and dine them without expecting to get at least some consideration."

Even so, the settlement came unstuck --and another letter, dated Dec. 4, 1953, came from the FTC to Northfield, charging mislabeling. This letter so bewildered Bernard Goldfine, said he in sworn testimony, that he took it to his friend Sherman Adams to find out what it was all about. Adams then called FTC Chairman Edward Howrey, received in return a memo from Howrey that passed on advice on how the matter might be settled.

Lebandale Mills. New Hampshire's Republican Senator Norris Cotton has a 10% interest in this mill in Lebanon, N.H., controlled by Goldfine. Cotton's law firm, from which he still draws an annual salary, has represented both Lebandale and Lebanon Woolen Co., another Goldfine mill, for many years. In Lebanon, Cotton lives in a Goldfine-owned house at 4 Abbot Street, pays $75-a-month rent.

Last week Bernard Goldfine swore that Cotton had not represented him as a lawyer since going to Congress in 1947. Yet, in at least one instance, Norris Cotton still does represent Goldfine. The instance is that of the Rogers Hotel in Lebanon. Goldfine is the real owner of the Rogers. In 1943, Cotton negotiated the purchase of the hotel as a front for Client Goldfine, oversaw the title search and made the option payment from his personal bank account. Goldfine repaid Cotton for the option, but it was still necessary for Cotton to take final title to the hotel. As far as the public record is concerned, Cotton still holds the title, although he says he has filed with Goldfine a letter stating that he was Goldfine's agent in buying the hotel and would turn the property over to Goldfine or to Lebandale Mills whenever desired. Fifteen years later, the transfer has still not been desired.

In 1956, when Goldfine's East Boston Co. got in trouble with the Securities and Exchange Commission, Senator Cotton called the SEC's general counsel into the office of New Hampshire Senator Styles Bridges to put in a good word for Goldfine. Also present: Goldfine's old and great friend, Maine's Republican Senator Fred Payne. Payne has admitted receiving vicuna coats and hotel hospitality from Bernard Goldfine. And last week to a TIME reporter he confirmed a rumor that had received considerable currency around Washington: in 1952, Goldfine had advanced Payne $3,500 of the $5.000 needed for down payment on the purchase of Payne's $22,500 home in Hillcrest Heights, Md. The $3,500 came in the form of a loan: it has not been repaid, although Payne says he plans to make the loan good to Goldfine when he sells the house--"or before."

Mascoma Mill. This mill, also in Lebanon, is presumably another Goldfine property. In 1955, Textron Inc., then Mascoma's owner, served notice that it planned either to dismantle or sell Mascoma. Into the picture stepped Lebanon's First Selectman Joseph Perley, another Goldfine friend; Perley was a prime civic mover in reducing local taxes on Goldfine local properties, with the result that Lebandale Mills, listing assets of nearly $1,000,000, paid only $2,528 in town taxes last year. Perley said he knew of an Ohio textile firm that would buy Mascoma--although he declined to reveal its name. The Ohio firm never showed up. The county records show that Joe Perley himself bought Mascoma Mill from Textron on May 2, 1955 for $65,000.

But the records show little else. So far as they are concerned, Perley is still the owner. He says he sold Mascoma to Goldfine within a day or two after his purchase. Asked if he has records to verify the transaction, he disappears into a side office, stays for half an hour, returns emptyhanded. Then he says that a Concord attorney handled the deal. The Concord lawyer denies it. Then Perley says that a Boston lawyer handled it. The Boston lawyer denies it. Questions: Who does own Mascoma Mill--and why the mystery?

Brucemark Inc. & Wilton Woolen Mills. On Nov. 18, 1955, a paper firm named Brucemark Inc. purchased the Wilton Woolen Mills of Wilton, Me. Partners in Brucemark: Robert C. Baker and Bernard Goldfine. Wilton Woolen has been in receivership since last February, just last month was put up at public auction. Buyer of the Wilton Woolen Building: Bernard Goldfine, for $35,000.

Baker (through his wife) has sued Goldfine. Baker's charge: in 1955 he was approached by Goldfine, who asked him to invest $150,000 toward buying a mill. Goldfine refused to name the mill, saying it was a "hush-hush" deal. In return for his investment, says Baker, Goldfine promised Baker a $30,000-a-year job as his administrative assistant. Baker put up the $150,000--but says he never got any of the salary from Goldfine. Baker claims that Goldfine actually controlled Wilton Woolen even before Brucemark bought it. He says that Wilton Woolen was a losing proposition, and Goldfine wanted to cut his losses. Baker charges that Goldfine duped him into paying, through Brucemark. $150.000 to buy Wilton Woolen stock already owned by Goldfine.

The Boston Common Garage. In May, 1946, Goldfine's good friend Democratic Governor Maurice Tobin pushed through the Massachusetts legislature a bill enabling Boston to give an option to prospective builders of a vast garage under Boston Common. On July 2, Motor Park Inc., with plans already in hand for a 3,500-car garage, was incorporated, with Goldfine Business Partner William Mac-Donald as president. Within a few days, on July 10, Boston's Democratic Mayor James Michael Curley. another dear Goldfine friend, without consulting the city planning commission or putting the project up for bids, gave Motor Park Inc. the exclusive option to build the Boston Common garage. The man with the money behind Motor Park Inc.: Boston's Bernard Goldfine.

Goldfine stood to make plenty. He already had owned a small building facing Boston Common. In June he bought another. In July he bought still another: the Little Building, one of Boston's biggest. If the Boston Common garage was built, the value of all these properties figured to soar.

But there was a pesky problem of financing the garage--and it had still not been solved in 1950. The garage promoters hit on the bright idea of selling its virtues as an atomic bomb shelter. On June 21, 1950, Massachusetts Democratic Governor Paul Dever and Boston's Democratic Mayor John Hynes, both old Goldfine friends, visited the White House to ask President Truman for Reconstruction Finance Corp. help in building the garage-bomb shelter. Next day, on June 22, Massachusetts' Democratic Representative John McCormack, one of the best Goldfine friends of all, publicly announced that President Truman was intensely interested in the civil defense aspects of the Boston Common garage.

Truman's interest took visible form. Within a week, John Steelman, then one of President Truman's closest advisers, moved into action. A June 30 entry in the diary of RFC Commissioner Walter Dunham read: "Mr. John Steelman, White House, telephoned. Said the President had requested him to call each director of the RFC regarding the garage to be constructed under Boston Common . . . Dr. Steelman also stated that the study of the situation revealed that conditions would justify extreme interest on the part of the RFC." That same day, June 30, 1950, the RFC authorized a $12 million loan to Motor Park Inc.

Things looked good. For the first time, Bernard Goldfine stepped out front as the man behind the garage scheme, throwing a huge party at Boston's Copley Plaza Hotel and proclaiming himself Boston's protector against atomic attack. But RFC had attached a hooker to its offer: it required Motor Parks Inc. to put up $3,000,000 in listed, marketable securities as collateral. Goldfine either could not or would not raise the collateral. Therefore on Dec. 12, 1950, a remarkable delegation called on President Truman to urge that RFC relax its requirement. The delegation: Goldfine, Mayor Hynes, Governor Dever. Congressman McCormack and Maurice Tobin, by then Secretary of Labor. Result: no deal--the Fulbright Senate investigating committee was already moving in on RFC scandals.

That left Goldfine in a spot. In 1951 his friend Governor Dever desperately tried to ram through the legislature a bill changing the rules of the state's lending institutions to permit them to buy Motor Park Inc. bonds. The move got nowhere, but Dever remained Goldfine's best bet. In 1952 Goldfine lent John Fox's Boston Post $400,000 in return for supporting Governor Dever for reelection. Dever lost anyhow--and the garage under Boston Common was clearly a moribund project. By that time Goldfine had pumped an estimated $500,000 into promoting it--but he managed to halve his losses by selling equally devious John Fox (TIME, July 7) about $225,000 worth of the dead dog.

*Including a $275 suit by a mason who repaired his house, had Goldfine's Lincoln seized by court order. Goldfine settled.

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