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August 02, 1973 - Image 1

Resource type:
Text
Publication:
Michigan Daily, 1973-08-02

Disclaimer: Computer generated plain text may have errors. Read more about this.

THE
Sunaner Daily
ol. LXXXIIl, No. 53-S Ann Arbor, Michigan-Thursday, August 2, 1973 Ten Cents Eight Pages
eth iehe :0 come
tax on 4-year profit

By DAN BIDDLE
Copyright 1973, The Michigan Daily
Over the last four years, the second
largest steel company in the United
States reported a profit of nearly $700
million but paid a net federal income
tax of less than zero.
A Daily investigation has shown
that Bethlehem Steel Corp., a Pennsyl-
vania-based firm with assets in ex-
cess of $1 billion, paid far less in
federal income tax for 1969-72 than
it received in federal income tax re-
funds during the same period.
THE CORPORATION'S eye-opening tax
situation violates no existing laws, and ap-
parently stems from differences in the sepa-
rate accounting methods used by Bethle-
hem in filing tax returns and over-all finan-
cial statements to the government.
The corporation paid some $45 million in

federal income tax for 1971-72, but that sum
was more than offset by some $66 million re-
ceived in federal refunds for 1969-70. Bethle-
hem paid no federal income tax during
those two years.
For the four-year period, Bethlehem re-
ported a net income - after expenses and
before federal income taxes - of $675.3 mil-
lion.
IN THAT SAME PERIOD, however, the
company received $21.9 million more in
federal income tax refunds than it originally
paid the government.
According to the Internal Revenue Service
(IRS), the manufacturers of primary metals
-including steel - give an average of about
50 per cent of their net income to IRS coffers.
Bethlehem Steel has for four years aver-
aged a negative number: a little more than
three cents returned by the government on
every dollar of the company's reported net
income.

THE DAILY learned of the uncanny dis-
crepancy between profit and income tax
from the steel company's own annual re-
ports to stockholders, and from its 1969-72
10-K statements (see chart) to the Securi-
ties and Exchange Commission (SEC).
Corporations are annually required to file
10-K, which is a complete financial account-
ing, to the SEC in order to establish the com-
panies' ability to distribute dividends to
stockholders.
A spokesman for Bethlehem Steel at the
corporation's headquarters in Bethlehem,
Pa., expressed surprise at his company's tax
figures and told The Daily he would "have
to check this with the people in the account-
ing office."
THE SPOKESMAN, when contacted Tues-
day, insisted that "there must be something
wrong" with the figures.
"I can't believe this," he continued. "This
See BETHLEHEM, Page 5

Dash accuses
Mitchell of
ITT perjury

WASHINGTON (I)-Former Atty. Gen.
John Mitchell was accused of an act of
perjury yesterday in connection with last
year's settlement of the antitrust case
against the International Telegraph &
Telephone Corp. (ITT).
Samuel Dash, chief counsel to the Sen-
ate Watergate committee, released a
March 30, 1972 memo from former presi-
dential counsel Charles Colson to H. R.
Haldeman, then White House chief of staff.
THE MEMO said Mitchell knew about
the ITT pledge of $400,000 to help under-
write the 1972 Republican National Con-
vention a month before settlement of the
antitrust case.
Mitchell has testified he had no such
knowledge.
Dash said the memo appears to show
"an act of perjury on the part of Mit-
chtll."
COLSON'S MEMO briefed Haldeman on
the status of administration records deal-
ing with the ITT controversy that arose
last year during the confirmation hearings
of Mitchell's successor as attorney gen-
eral, Richard Kleindienst.
Clson said another document not in
his possession would show the President
also knew of the ITT convention finance
plede".

In a statement issued last night, Colson
said ITT files that were not shredded but
sent to the Securities and Exchange Com-
mission (SEC) would show that Mitchell
was put on notice about the ITT conven-
tion arrangement a month before the anti-
trust suit settlement took place.
COLSON SAID the files contained a June
30, 1971 memo from Herbert Klein, then
White House communications director, to
Haldeman, setting forth a $400,000 ar-
rangement with ITT. Copies were ad-
dressed to Mitchell and William Timmons,
a White House aide.
"This memo put the AG (attorney gen-
eral) on constructive notice at least of
the ITT commitment at that time and be-
fore the settlement, facts which he has
denied under oath," Colson said in his
memo.
During the Watergate hearings yester-
day Dash questioned Haldeman about the
memo. The former White House aide said
he was not familiar with it nor did lie
remember receiving it.
COLSON'S MEMO said also there was a
second document in the SEC file which
would contradict Mitchell's testimony be-
See MITCHELL, Page 2

^AP Pho
JOHN WILSON, chief legal counsel for both John Ehrlichman and H. R. Haldeman,
suddenly became the center of attention at the Watergate hearings yesterday.
During a condemnation of the questioning tactics of committee member Sen. Daniel
Inouye (D-Hawaii), Wilson referred to the Hawaiian senator as a "little Jap."
Pressed on the point Wilson later admitted, "That just the way I talk."

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