U THE MICHIGAN DAILY Saturday, January 17, 1970 LOBBYING 'PAYS OFF' PEOPLE VS. CARS: Foundation wins tax loophole Proposed Observatory-Forest extension touches off dispute I WASHINGTON (JP -A months-{ long, day and night lobbying ef- fort won the W. K. Kellogg Foun- dation of Battle Creek, Mich., pre- ferential treatment in the House- passed tax reform bill and ulti- mately helped other foundations beat back curbs on their activities. Private congressional character- izations of the Kellogg effort ranged from "crude" to "tough" to "persistent" to a description of Kellogg lobbyist James Dick Rid- dell as a man who "knew j *u s t where to go."' The Kellogg interests' persist- ence won them a hand-tailored exemption from limitations on business ownership, with t h e George Hormel Foundation of Austin, Minn., also profiting from the law. Their success typified the work of some private interests in argu- ing for tax law exemptions while 'tax reformers kept public atten- tion spotlighted on attempts to narrow well-known loopholes such as the oil depletion allowance. At stake for the foundation was control of certain businesses. The best-known of these were the cer- i tY1GYl11A {.iV1111i11LtiGG tlCLtlUIGIA 4tiG (,Q.1t ' i, reform bill first, was relatively' tough on foundations, including a requirement t h a t foundations must divest themselves of control of any businesses by reducing its holding of voting stock in a n y particular firm to 20 per cent or less. The divestiture requirement wasI the focus of the Kellogg activity. The Kellogg Foundation, which controls 50.2 per "cent of the stock of the Kellogg Co., argued that its ability to contribute to char- itable and philanthropic purposes could be severely damaged if ib were firced to sell the bulk of its holdings. Kellogg's lobbying effort w a principally handled by Riddell, a Washington-based attorney, a n d by Deryl Fleming, director of pub- lic relations for the cereal maker. The result in the Ways and. Means Committee, approved in turn by the full Mouse: 15-10 ap- proval of exemptions that would permit the Kellogg Foundation to hold all its stock in Kellogg Co. The result in the Senate Finance Committee: 9-7 pproval of a loos- ening of the entire divestiture pro- vision such that any foundation could hold up to a 50 per cent in- terest in a business. Thus, Kellogg is safe whether the House version or the Senate Finance version is enacted. Riddell and Fleming propound- ed the Kellogg case to a reporter for much of two hours. "Now you've heard about what we told the congressmen a n d senators," Fleming said. "We must've talked to practic- ally every one of them 17 times," said Riddell, who was a tax coun- sel to the Ways and Means Com- mittee from 1953 to 1956. "We had a good case, "we just had to sell it," said Riddell. "If I couldn't win with a case like this, I'd quit. But the other foundations thought we were crazy. They told us we might as well give up." having a drink about midnight Continued from Page 1) orities is necessary. "It has been and I'd t h i n k of somebody we SGC Coordinating Vice Presi- the predisposition of urban de- hadn't contacted," Fleming ex- dent Bruce Wilson feels the term sign in Ann Arbor to emphasis plained. "So off I'd, go to the "minor infringement" to be an vehicular accessibility and travel' phone booth and get the guy out: underestimation. "The extension over pedestrian accessibility and' of bed." would essentially destroy the pe-- movement. Riddell estimated - conserva- destrian traffic pattern from Ob- "Ann Arbor must begin to es- tively, he said - that they con- servatory and Geddes down to tablish priorities to determine tacted 2,000 persons across t h e Forest," he argues. whether city planning should em- phasize the purely physical di- country. He wouldn't quite con- On Nov. 6. another report from mensions of roadway circulationj cede that the purpose of such calls city planning was issued by and efficiency or stress consider- was to exert political leverage, but Michael R. Prochaska who is now 'atnon of neighborhood. integrityE he observed that representatives the city planning director. ain coheig, radntict from states like Arkansas, Louis- and cohesion, area identification from sates eAransasr Louis- This report agrees with Faber and aesthetic valuation, the re-3 Tana and Texas became aware that; that a re-assessment of city pri- port concludes. their states grow rice - and Kel -____ logg buys lots of rice; congress- men from Oregon and Wisconsinc major paper producers-and Kel- E school counselors logg buys plenty of cartons. "He knew just where to look," do" 3 said Rep. Martha Griffiths (D- mo nlore luau adviseT Mich.), an opponent of the Kel-I logg exemption.! The Ways and Means Commit- By SHARON WEINER The office officially opened last tee chairman, Rep. Wilbur Mills Education students can get more tem ated adjacent to the office (D-Ark.), was the target of re- than just counseling in their stu- of Students for Educational Inno- ports from Arkansas that Kellogg dent counseling office. vation ,in the University School might buy its rice elsewhere. "We serve partially as an input Bldg., the office offers "conver- Mills said, with constituents center for students who feel a sation, coffee, a coke machine, and support, "Tell 'em to go to hell." need to complain, question, or dis- a couch as well as academic in- He opposed the exemption unsuc- cuss any class, professor or re- formation," Astrein says. cessfully. quirement in the school," says un- "Anyone with interest in teach- Some members said courtesies dergraduate coordinator of the ing as a profession should stop by' such as rides home in Kellogg air- office Bruce Astrein. "It's a place when they are freshmen or soph- craft were extended during t h e to bring information as well as to omores so they can plan for the persuasion effort. Rep. Griffin receive it." necessary courses," he notes, "al- took one of the rides, he said, to though we can also help upper- tion She voted against ite eProf. Alfred F. Conrad of the ,classmen who have just decided. t Law School will serve as presi- to become teachers'" As the Ways and Means com- dent of the Association of Ameri- "Students can pick up informa- mittee worked on foundation can Law Schools next year. tion on psychiatric draft, and eal-making Kellogg Co. and the But the Kellogg lobbyists didn't meat-packing Hormel Corp. ! give up - and they didn't confineE The House, whose Ways a n d ; their contacts to congressmen. Mean. committee handled the tax "We might be sitting somewhere Heavy Duty Steering and Suspension Parts " BAILL JOINTS " IDLER ARMS " TIE ROD ENDS This report points out that the area that would be affected by the extension of Observatory to Forest is characterized by high density student housing. It says "the cohesive and vital nature of the area would be seriously threatened if traversed by high volume, non-local traffic," which would result from the proposed extension. In keeping with his views about the extension, Prochaska recom- mended to the planning commis- sion that the city use an alternate route which would extend Ob- servatory only to Washtenaw Ave. Prochaska believes the alternate route would preserve community land use and pedestrian circula- tion, and at the same time "move the traffic in a safe way." Prochaska believes it is not pas- s ible for the present street ar- rangement to handle the increase in traffic it will have in the next few years. "If you do approve the Obser- vatory-Forest extension, you are encouraging auto traffic into a pedestrian and residential area. If you don't approve it, you have to look for other alternatives," he says. In the 1963 Central Campus Planning Study, the University also recommended the same basic idea-new roads to handle the in- creasing volume of traffic. "Our primary concern in the study was how to provide access to the hospital," particularly the 1,000 car parking structure, said Fred Mayer, University planner. He explained that since the study was done, the neighborhood has changed to a student neighbor- hood. Another factor which may have influenced the planning commis- sion to support the Observatory- Forest extension, says Mayer, is that it "helps take the traffic off the street where you have kids going to elementary school." SGC vice president Wilson, l however, is concerned about the students living in the neighbor- . hood and the students living in Markley Hall who have to cross aObservatory to get to class. "The Observatory-Forest exten- sian represents a .devotion to auto- Smobile traffic in the city which will invade the residential district as well as pedestrian traffic," he says. Despite the protests, and Pro- chaska's report, the city planning commission is sticking by its orig- inal proposal, now awaiting con- sideration by the council. At the same time , Wilson is drafting an SGC resolution he plans to introduce next week call- ing for SGC to request the city not extend Observatory. ~1 measures, language suggested by Riddell w as presented which would exempt from business di- vestiture rules a foundation which owned 55 per cent or less of a' business, had been established by the irrevocable trust document of a living person prior to Dec. 31, 1939, and held a business whose stock was traded on a public ex- change. Kellogg Foundation naturally fit the formula. ppr C* NTRAE Announces Open Petitioning Grads and Undergrads for . aTH+REE SEATS Sign up for interviews at SGC offices, 1 st floor, 1548 SAB Petitions due Monday, January 19, 5:00 P.M. K Live in an exotic setting... Decorate Your Room with Bed- spreads. Pillows, Wall Hangings; Pottery, and Incense from India and Persia. He will become the third Uni- versity 1 a w faculty member to hold the presidency of the asso- ciation, made up of all the fully accredited law schools in the na- tion. As president-elect, Prof. Conrad will serve on the associa- tion's executive committee during the current year. The association is an organiza- tion through which some 120 member schools seeks to improve legal education and research by exchanges of information and joint action. The designation "eminent eco- logist," one of the highest honors of the Ecological Society of Amer- ica, has been conferred upon Prof. Stanley A. Cain. Prof. Cain, who now serves as Charles Lathrop Pack professor of conservation in the School of Natural Resources, recently com- pleted three years as U.S. assist- rant secretary of the interior for fish, wildlife, and parks. The society acknowledged that Prof. Cain "has preceded us and led us in the development of the science of ecology." placement referrel services in the office, he adds. Astrein encourages "students interested in counseling or just interacting with other individu- als" to stop by the office. "We're open five days a week nine to five - including the lunch hour," he says. According to Astrein, over 100 students come in for counseling or conversation e v e r y day, al- though, he adds, "That's not much compared to t h e 5,000 students who take classes in the educa- tional school." "We're going around to t h e dorms to publicize our services," he says. "We'renot only serving as a counseling office, but as a center for expanding public relations within the education school and promoting the school to students in the literary college, adds grad- uate coordinator Susie Brigham. "We are not competing with the regular counselors," 'she says. "We're only a supportive group, but we can offer a peer relation- ship in our office which may be more comfortable for many stu- dents." 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